Artificial Intelligence in the Public Sector: A Focus on Economic Regulation

ABSTRACT Artificial intelligence is increasingly used to support various public functions, including market regulation, both in rule-making and enforcement. Techniques such as web scraping and sentiment analysis are being employed in regulatory authorities’ fact-finding investigations, while AI is also used in public consultations to identify the most relevant or significant comments. Moreover, AI tools contribute to making enforcement activities more efficient. Despite the many opportunities these systems offer – such as greater speed and accuracy in information gathering and, consequently, the enrichment of data sources – several critical issues arise. Among these, the opacity of decision-making processes and the potential ‘impoverishment’ of the regulatory process itself are particularly significant. After analysing some AI applications in market regulation in the Italian context, this paper will examine insights from the ‘new safeguards’ introduced by the EU Artificial Intelligence Act (AI Act).

KEYWORDS Artificial intelligence - Public sector - Economic regulation

TABLE OF CONTENTS 1. Introduction. – 2. AI Applications in Market Regulation. – 2.1. Rule-making. – 2.2. Supervision/Enforcement. – 3. Benefits and Criticalities of AI in Market Regulation. – 4. What Insights Does the Artificial Intelligence Act Offer for AI-driven Market Regulation? – 5. Final Remarks.