The Algorithmic Accountability Act and the Future of Algorithmic Regulation

February 27, 2022

Earlier this month, Senators Cory Booker and Ron Wyden and Congresswoman Yvette Clarke reintroduced the Algorithmic Accountability Act of 2022. The Algorithmic Accountability Act was originally introduced in 2019 to “study and fix flawed computer algorithms that result in inaccurate, unfair, biased, or discriminatory decisions impacting Americans.” However, the bill stalled out in Committee and did not move past the House Subcommittee on Consumer Protection and Commerce and the Senate Committee on Finance.

Once reintroduced, the legislation maintained the goals of the 2019 version but was updated with improvements that focused on “clarifying what types of algorithms and companies are covered, ensuring assessments put consumer impacts at the forefront, and providing more details about how reports should be structured.”

Under the Act, the Federal Trade Commission (“FTC”) would be required to ensure that certain entities that meet a certain threshold that would label them as a “covered entity” to evaluate the impact their algorithmic systems have on consumers and annually submit a portion of those evaluations to the FTC. These evaluations would be labeled as “impact assessments” and the annual FTC submissions as “summary reports.”

The requirements for what must be included in impact assessments includes:

  • Description of any current process being replaced by a new Augmented Critical Decision Processes (“ACDP”)
  • Documentation of any data or other input information used for development, testing, maintaining, or updating
  • Testing and evaluation of the privacy risks and privacy-enhancing measures
  • Testing and evaluation of the current and historical performance including testing both before and after deployment
  • Documentation of significant dates of development and deployment and key points of contact
  • Information about the stakeholder engagement
  • Evaluation of the rights of consumers, including the degree to which a consumer may contest, correct, or appeal a decision or opt out of such system or process; and
  • Identification of likely material negative impacts on consumers and assessment of applicable mitigation strategies

Meanwhile, the requirements for what covered entities must annually submit to the FTC in their summary reports includes:

  • The critical decision being made and the purpose of (and need for) the Augmented Decision Systems (“ADS”) or ACDP
  • The data and other inputs used and their sourcing
  • The performance of the ADS or ACDP
  • Stakeholders consulted
  • The transparency, explainability, and degree to which a consumer may contest, correct, or appeal a decision or opt out of such system or process
  • Any likely material negative impacts identified, and the steps taken to remediate or mitigate, including any publicly stated limitations placed on certain uses of the ADS or ACDP
  • Which requirements of impact assessment were and were not completed and the rationale for those not completed
  • Any requests to the Commission for new capabilities, tools, standards, and resources to improve any ADS, any ACDP, or the impact assessment process

The Act goes on to place other requirements on the FTC. If passed, the Act would require the FTC to establish certain reporting guidelines, which would include a website with a public depository of a subset of the summary reports that they received for that year. This repository would allow consumers to review the various reports and, if the consumers wanted to, search, sort, and download from the repository. Additionally, within both the regulation and enforcement of the Act, the FTC would be required to work with other federal and state regulatory and enforcement agencies to ensure consistency across the board. Finally, the FTC would be required to create guidelines to assist organizations understand if they would be considered a “covered entity,” while also reviewing and, if necessary, updating those guidelines and other requirements within the Act every five years.

It is unclear at this point if, unlike its predecessor, the Algorithmic Accountability Act of 2022 will move past the committees and be put up for a vote. However, what is clear is that, if passed into law, the Act would significantly increase the regulation of algorithms that affect consumer’s lives.

To assist the FTC would instituting the requirements within the Act, the bill would establish a new Bureau of Technology within the FTC. This Bureau would be run by a Chief Technologist and staffed by fifty experts in various relevant fields.

It is unclear at this point if, unlike its predecessor, the Algorithmic Accountability Act of 2022 will move past the committees and be put up for a vote. However, what is clear is that, if passed into law, the Act would significantly increase the regulation of algorithms that affect consumers’ lives.

Jake Schindler

Jake graduated from the University of Tennessee—Knoxville in 2015. After graduating, he moved to Washington, D.C. for five years and worked as a paralegal at two different law firms before deciding that the law school route was right for him. In law school, Jake is a member of JOLT, the Holderness Moot Court Sports Law Team, and participates in various probono projects.