Israel is in the process of updating its privacy laws to address modern challenges and opportunities including those posed by artificial intelligence (AI). One of the raised topics is whether inferred data generated by AI-based processing of personality evaluations and consumption habits should be considered sensitive data.
On December 26, 2023, the Constitutional Committee of the Knesset (the Israeli parliament) has held its fourth hearing on Bill No. 14 to the Protection of Privacy Law, which is the first step of a twofold effort to align the Israeli law with the EU General Data Protection Regulation (GDPR) and other international standards. The bill introduces significant changes to the basic terminology and concepts of the law, such as the definitions of personal data, sensitive data, biometric identifiers, processing, controller, processor, and mandatory registry of databases operated by data brokers, public authorities and of large sensitive databases.
The impact of AI-based processing on privacy and data protection is evident in the bill. This is especially relevant in light of the recently published governmental AI framework policy paper, which sets the ground for existing regulators, including the Privacy Protection Authority (PPA), to use their enforcement powers in relation to AI development and use.
One of the debated topics in the Constitutional Committee was the Justice Department’s proposal to view data generated from processing, including through automated and AI means, and revealing sensitive consumption habits and personality traits, as sensitive data. This would mean that such data would be subject to enhanced cyber security requirements, database registration (under certain conditions) and large fines for violations. The proposal reflects the concern that AI may infer sensitive information from seemingly innocuous data, and potentially harm the rights and interests of data subjects.
Further discussions and amendments are planned for the next few weeks, as the bill progresses towards its final approval. The bill is expected to have a significant impact on the Israeli privacy landscape and the use of AI in various sectors and domains.