OpenAI is facing an investigation by German authorities concerning its privacy practices and compliance with the European Union’s General Data Protection Regulation (GDPR). Regulators are seeking answers about the company’s intentions and capabilities to adhere to the EU’s stringent data privacy laws.
OpenAI under scrutiny over data protection
Marit Hansen, the commissioner for the northern German state of Schleswig-Holstein, informed Agence France-Presse that regulators are inquiring whether a data protection impact assessment has been conducted and if data protection risks are under control. Germany is also requesting information on issues arising from the European GDPR.
This development is not unexpected, as German watchdog groups have recently recommended further examination. However, it adds to the complex situation OpenAI is currently facing in Europe.
Since the release of OpenAI’s GPT-4 model in mid-March, the company has encountered increasing scrutiny from European regulators. Italy was the first Western nation to impose a ban on the products, while the company and local regulators determine whether OpenAI can comply with GDPR and Italian privacy laws.
OpenAI has not yet disclosed how it plans to respond, and German regulators expect the company to reply to their inquiries by June 11.
The primary issues regulators raise pertain to the training data utilized in creating GPT artificial intelligence models. Currently, users cannot opt out of having their data included, nor can they correct the models if errors occur.
Impact on OpenAI users and cryptocurrency traders
Caught in the midst of this ongoing issue are OpenAI users, including those paying premium subscription fees for personal and business access to the GPT API. Cryptocurrency traders and analysts utilizing the API or third-party apps built on the API for market prediction or autonomous trading in the EU could be affected by any binding litigation or comprehensive bans.
If a ban is enforced, it could compel companies or individuals using these bots for cryptocurrency trading and analysis, such as exchanges, news sites, and blockchain firms, to operate outside of the EU.