13 May 2024 5 mins

The marketing landscape is a dynamic beast, constantly evolving with new tech and consumer trends. Artificial intelligence (AI) has emerged as a powerful tool, promising efficiency, personalisation, and data-driven insights. While AI offers benefits, particularly for marketing and tech agencies, embracing it requires a clear understanding of the potential legal pitfalls.

More and more creative and tech agencies are asking me about the legal risks of AI, so in this article, I share my view, based on the information that’s currently available. I’ll delve into the key risks associated with AI used in marketing and how to mitigate them.

The evolving legal landscape of AI

The UK government is currently developing a robust legal framework for AI.The UK government has yet to introduce specific legislation that regulates AI. However, it has instructed sector specific regulators such as the Financial Conduct Authority to use a framework to regulate AI in the sector it’s responsible for overseeing. While specific details remain under wraps, we can expect regulations that promote responsible AI development and deployment.

Here’s a breakdown of the key legal areas impacted by AI in marketing:

  • Copyright and Intellectual Property (IP):
    AI can generate creative content like text, images, and videos. However, questions arise regarding ownership. Does the agency, the programmer, or the AI itself hold the copyright?

    Recent US (& UK) cases offer cautionary tales. In “Getty Images vs. Stability AI,” The stock photography company accused Stability AI of “brazen infringement of Getty Images’ intellectual property on a staggering scale.” It claims that Stability AI copied more than 12 million images from its database “without permission … or compensation … as part of its efforts to build a competing business,” and that the startup has infringed on both the company’s copyright and trademark protections. Understanding who owns the AI-generated content, where the training data from the AI machine came from and ensuring it doesn’t infringe existing intellectual property rights is crucial. What data was used to train the machine that has generated the creative work? Was that data scrapped from somewhere without permission?
  • Data protection:
    AI thrives on data, particularly consumer data. The UK’s version of of GDPR – The Data Protection Act 2018 – governs data collection, use, and storage. When using AI for marketing purposes, agencies must ensure personal data is collected with explicit consent, used only for the intended purpose, and stored securely. Fines for GDPR breaches can be significant, so robust data handling procedures are vital.

  • Algorithmic bias & discrimination:
    AI algorithms can fuel societal biases present in their training data. Imagine an AI ad platform unintentionally targeting certain demographics based on race or gender. This could lead to the program showing ads unfairly to some people. To avoid this, agencies should consider using a variety of data to train the program and regularly check its work to make sure it’s treating everyone fairly. This is known as ‘human oversight’. 

Minimising AI risks in your marketing agency or business

Fortunately, there are ways to minimise the legal risks associated with AI:

  • Invest in AI training:
    Train your team on responsible AI use, emphasising fairness, transparency, and data protection.

  • Conduct ethical impact assessments:
    Before deploying any AI tool, assess its potential impact on consumers, considering issues like bias, privacy, and manipulation.

  • Choose reputable AI providers:
    Partner with AI suppliers known for ethical practices and robust data handling procedures. Make sure you read their terms of use and privacy policy…and save a copy in case you need to refer to it later as they regularly change!

  • Document your AI process:
    Maintain clear records on how AI is used in your agency, from data collection to content creation and decision-making.

  • Seek legal advice:
    Consulting a lawyer specialising in IP, data protection and contract law is crucial for crafting policies and procedures that adhere to current regulations and anticipate upcoming legislation.

Remember to check your client contracts

Brands are tightening their belts on AI usage by agencies. AdAge reports a rise in agency contracts with restrictions on AI tools. These restrictions can be strict, with some requiring pre-approval for any AI use. As AI lawsuits climb, brands are likely to prioritise such clauses to safeguard their campaigns. To avoid legal trouble, agencies should carefully review contracts (or consult a lawyer) and be prepared for stricter AI regulations.

Conclusion

AI presents exciting possibilities for tech and marketing agencies and most other UK businesses, but responsible use is paramount. By understanding the legal risks and implementing the above mitigating strategies, you can harness the power of AI while safeguarding your reputation and ensuring legal compliance.

Remember, the legal landscape surrounding AI is constantly evolving. Staying informed and seeking expert advice will be key to navigating the cutting edge while staying on the right side of the law.

This article is not intended to be legal advice and should not be relied on as legal advice. We’ve prepared it to help your thinking around the legal risks of AI. If you would like legal advice in this area, please contact us. 

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Ryan Lisk

Ryan has helped a vast number of businesses protect and control their intellectual property as well as drafting and advising on consumer and commercial contracts.

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