How sure are you that AI is not secretly using your customer data while hiding behind broadly worded clauses in your business agreements?
In commercial business transactions, protecting your customer data (“information”) is of utmost importance. It is essential to not only secure access and usage of the information but also to mitigate associated data protection risks. Failure to protect your information may have adverse consequences for you, especially where the information includes third party information.
There are patterns we have identified when it comes to identifying potential issues in regard to AI using your information to train its models. Here are a few clauses you need to be on the lookout for (without limitation), which allow AI training even if data anonymisation or information being secured is mentioned.
- Clauses that allow the vendor to use your information to improve and maintain the services or add on new features. Improving and maintaining the services can be subject to different interpretations. What does improving and maintaining practically look like? Reference to these terms could potentially mean anything and you do not want to give a vendor power to decide when an improvement or maintenance has occurred, entitling them to use your information. Parties should be in unison in terms of what these terms actually mean, to avoid the hidden effect of the use of your information to train AI models under the umbrella of product/service improvement and maintenance. The use of some words, although not capitalised or defined throughout an agreement, may result in a potential conflict or litigation, with each contracting party having own interpretations of the same.
- Clauses that allow a vendor to collect, use and disclose aggregated and anonymised data extracted from your information for any lawful purpose. For purposes of certainty, it needs to be clear what a lawful purpose is. The reference to lawful purpose is quite broad. Parties can narrow down the circumstances under which a lawful purpose will be triggered in the application of clauses of this nature.
- Clauses that permit a vendor to use automated systems to analyse data for purposes such as improving accuracy, personalisation and functionality. Data analysis can look different to each party. To avoid vague language and uncertainty, “analysing data, improvements” must be defined.
In conclusion, if you intend to allow a vendor to use your information for improving, analysing, developing, training their AI models, you need to decide:
- Whether you want outright prohibition for the use of your information under the circumstances highlighted in the clauses mentioned above for AI model training. e.g. No use of your information whatsoever for AI model training;
- Narrow down the circumstances under which you will permit the use of your information. This can include allowing the use of your information for statistical purposes, not AI training. Define what statistical purposes looks like in the agreement; and
- If you want the right to opt out in the event you agree to the use of your information for AI model training.
This article is written with AI assistance for general information purposes only and does not constitute professional legal advice. Please consult your own attorney for your unique circumstances.
We assist clients with reviewing AI clauses in business agreements. Should you require our services, please feel free to contact Hazel at info@mhmattorneys.co.za or call/whatsapp on: 0824088884
