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22 Aug 2022

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Large Tech Companies Might Be Forced to Reveal Their algorithms.

New legislation could force big tech companies to reveal their inner workings by making them open up the formulas that power their algorithms, experts warned.

Silicon Valley must reveal the inner workings of its algorithms under European Union plans which may force companies to share details of how their artificial intelligence systems make decisions, the EU's top justice official said.

The measure could give Europe more oversight of how big tech firms like Alphabet Inc's Google and Facebook Inc use data. It would also require them to open up proprietary algorithms that could enable rivals to catch up and potentially lead to job losses in the sector. The move comes amid increasing scrutiny over how big tech firms use personal data.

“We want companies to be more transparent in how they operate online,” said Margrethe Vestager, Commissioner in charge of competition policy, investigating how dominant tech companies use their market power. “If digital innovation is truly global, so should be our approach to regulating it,” she added.

A court decision could compel Japanese technology giants to make their algorithms public knowledge. Last month, a Tokyo court ruled in favor of Haneyumura BBQ Restaurant – in an antitrust case filed against Kakaku, operator of Tabelog, one of Japan's largest restaurant review sites.

Hanryumura alleged that Kakaku tampered with user scores to affect sales at its restaurants negatively and that the tampered scores made up $284,000 in damages to Hanryumura.

There has never been a case where a digital platform has been forced to disclose its algorithm as part of an antitrust case anywhere in the world. However, Kakaka was ordered by the court to disclose part of its algorithms in an unprecedented decision.

Technology firms have long argued that their algorithms should always remain classified as trade secrets and never revealed, even though Hanryumura is not allowed to reveal the information it was shown about Kakaka's algorithms. Since precedent has been set, other similar cases are likely to occur.

These developments provide ammunition for policymakers to force companies to be more transparent about how their algorithms work—especially where they can be essential to one's quality of life.

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