Legal Considerations When Implementing Machine Learning Algorithms in Your Business

If you are a business looking to implement machine learning for your company or for another business, this resource will provide you with a better understanding of the various legal areas that you need to consider.

It is clear that data is ultimately the fuel of our economy today. Throughout the last few decades, there has been a significant shift towards implementing an online economy in which data is shared and exchanged at unprecedented levels. Whether it’s a social media giant like Facebook or a small business collecting customer data, your personal data protection has become increasingly important and has been subjected to regulation and scrutiny over the last several years.

For many businesses, leveraging large data sets to understand their customers and create better products is a core business function. Machine learning algorithms are used to create better prediction models and improve the overall customer experience.

For example, a bank may use machine learning to predict a customer’s ability to repay loans. Similarly, an advertising platform may utilise this machine learning to predict whether a user may be more likely to purchase a particular product.

Regardless of the purpose your business has around collecting and processing data, it is critical to understand and adhere to your legal obligations. It is important to be well-versed on the laws and regulations that guide and protect data privacy in Australia as well as other laws that can impact your business, such as the GDPR.

Which Australian laws guide data and machine learning?

Automated Decision-making Practices

Generally speaking, systems that involve automated decision-making fall under the guiding principles for automated systems. Automated systems must comply with administrative legal principles of fairness, rationality, and transparency. In addition, they must comply with the fundamental privacy and human rights requirements.

According to Commonwealth Ombudsman, an automated system should be efficient, accessible, accurate as well as take into consideration the needs of vulnerable and non-digital ready users. The implementation of automated decision-making is also governed by the provisions of the Social Security (Administration) Act 1999 (Cth).

It is important to note that a machine learning algorithm can often be viewed as an automated system.

When creating an automated system, Administrative law, privacy requirements, and human rights responsibilities should be integrated into the function and design of an automated system.

Data Collection & Use

On many occasions, a machine learning algorithm will rely on personal data and information. If that’s the case, then you need to ensure that your data collection and usage practices adhere to the Australian privacy laws.

The core legislation that regulates data collection and uses in Australia is the Commonwealth Privacy Act 1988.  This Act, in particular, applies to all Australian businesses that:

  • have an annual turnover of $3 million AUD or more; or
  • trade in personal information; or
  • have a contract with the Commonwealth Government; or
  • provide a health service.

There are 13 Australian Privacy Principles to be aware of.

  1. Open and transparent management of personal information
  2. Anonymity and pseudonymity
  3. Collection of solicited personal information
  4. Dealing with unsolicited personal information
  5. Notification of the collection of personal information
  6. Use or disclosure of personal information
  7. Direct marketing
  8. Cross-border disclosure of personal information
  9. Adoption, use, or disclosure of government related identifiers
  10. Quality of personal information
  11. Security of personal information
  12. Access to personal information
  13. Correction of personal information

Some of these principles may or may not directly apply to your business. However, it’s recommended to familiarise yourself with these practices and take any required action or change to fulfill the requirements. To learn more about the specific guidelines of these principles, check out the Australian Privacy Principles Quick Reference.

For example, the first principle refers to Open and transparent management of personal information. This principle ensures that your business has a clear and transparent privacy policy that details how your customers’ data is used.

Other Data Protection Regulations

If your business interacts or deals with users (customers) from other parts of the world, it most likely has to follow specific regulations of these territories.

While almost every country has its own legal framework for regulating data privacy, there 3 main regulations Australian businesses need to be aware of:

  1. EU GDPR – The European Union General Data Protection Regulation
  2. UK GDPR – The United Kingdom General Data Protection Regulation
  3. CCPA – California Consumer Privacy Act

These regulations apply to businesses that are established in their respective territories but also businesses that offer services to individuals based in these territories. And so, if your business provides (or plans on providing) services or interacts with customers outside of Australia, it’s important to consider the international data privacy laws that can directly impact your business.

Key Takeaway

If your business is developing or planning on developing machine learning algorithms as a primary or secondary business initiative, it’s important to familiarise yourself and adhere to the guiding principles, regulations and legislation mentioned in this resource.

If you need assistance to ensure your machine learning framework adheres to various local and international laws and regulations, contact our business law team or call us at 02 8644 6000, and we’ll be happy to discuss all your legal requirements.

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Mark Lazarus

Mark Lazarus, the visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.

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Legal Considerations When Implementing Machine Learning Algorithms in Your Business

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Barry Lazarus

CEO & Notary Public

barry@lazaruslegal.com.au 

We’d be lying if we told you that this bloke isn’t the big honcho of our team, but his name is a dead give-away. The founder of Lazarus Legal, Barry is an old school, tough as nails lawyer. They don’t forge litigators like this anymore.

With decades of experience in both Australia and South Africa, his wisdom is as renowned as his name. Back in the days when Schwarzenegger and Van Damme were kicking ass on VHS, Barry was kicking ass in the courtroom. And after all these years, he still has a reputation for refusing to back down.Barry is definitely the badass you’d want in a fight – in court or otherwise. But really, he’s a big softie. Just don’t let him know you know that (although he probably won’t read this anyway – navigating the Internet is not his strong point).

Aside from putting other lawyers in their place, taking long walks on the beach and spending time with his family, Barry enjoys seeing others succeed. Not only is Barry a staunch and unmoving litigator, he has sharp business and commercial acumen having started up ventures from scratch and growing them into full-blown franchises – from real estate to creating ice cream, to making pasta. With his experience on both sides of the commercial and legal equation, you want this guy to be on your side, whether you’re the next Zuckerberg realising your genius, or the next Zuckerberg taking on your opponents in court.

When Barry is not busy lawyering about, he is a part-time lawn bowler and a wannabe comedian, but never took both as a day job, because let’s face it, he’s a lot better at his day job.

If someone ever threatens you to lawyer up…relax, call Barry and he’ll handle the rest. 

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Mark Lazarus Director

Mark Lazarus

Director

mark@lazaruslegal.com.au 

The visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past stories and experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.

He’s a bit of jet setter, splitting his time between Australia and the UK, maximising every hour of his professional life. He thrives on this adrenalin. It allowed him to work in private practice in Sydney, act for a host of famous celebrities in London, do a two year stint as a NSW barrister (and not the pretentious coffee type in the Melbourne laneways) and more recently did a gig as the Legal Director covering Europe, the Middle East and Africa for one of the world’s coolest fast-moving consumer good brands!  

As an Aussie and UK lawyer and former barrister, Mark not only has the gift of the gab but he’ll walk the walk to prove it too. He likes to think he’s a bit like Harvey Specter or Michael Corleone, the main difference is you can actually retain him as your lawyer and consigliere. He’ll tell you how it really is and will take on any challenge head on. Although litigation and court advocacy comes naturally to him, commercial and IP is what gets his blood pumping! 

When Mark is not out there doing his thing, you will probably catch him chilling at home with his family, on the sidelines of the soccer (football) pitch cheering on his two boys, crawling through mud obstacles, or training hard at the gym. Passion and commitment is what drives Mark to succeed, along with his burning desire to disrupt the legal profession by finding new ways to change the game.

He has sights on the future. So if you’re breaking new ground, ahead of the times, and on the verge of something big, but you need someone who’s got your back and who can give you straight up advice, this is the guy you will want on speed dial.

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