AIF-C01 Question 216
Select 4A company is developing an AI-powered recommendation system for its e-commerce platform. The system processes user data, including location and purchase history, to personalize recommendations. The company wants to ensure its AI system adheres to regulatory compliance standards for data privacy and algorithm accountability. Which of the following standards or laws should the company consider to remain compliant?
- A
International Organization for Standardization (ISO) 27001
- B
System and Organization Controls (SOC) 2
- C
General Data Protection Regulation (GDPR)
- D
Federal Risk and Authorization Management Program (FedRAMP)
- E
Algorithmic Accountability Act (AAA)
Show answer and explanation
Correct answers: A, B, C, E
Explanation
To ensure regulatory compliance, the company should consider ISO 27001 for information security, SOC 2 for secure handling of sensitive data, GDPR for user data protection in the EU, and the Algorithmic Accountability Act for algorithmic transparency and accountability. FedRAMP, while relevant to cloud services, is specific to U.S. federal agencies and does not apply in this scenario.
- A. Correct.
ISO 27001 is an international standard for information security management, which is critical for protecting user data processed by AI systems.
- B. Correct.
SOC 2 is a compliance framework that ensures systems are designed to manage data securely, relevant to any service processing sensitive information.
- C. Correct.
GDPR is a European Union regulation that sets strict requirements for user data protection and is directly applicable to AI systems processing personal data.
- D. Incorrect.
FedRAMP is specific to cloud services used by U.S. federal agencies. While important, it is not directly applicable to general AI systems used by e-commerce platforms.
- E. Correct.
The Algorithmic Accountability Act (AAA) is a U.S. law proposal to ensure transparency and accountability in AI systems, which is relevant to an AI-powered recommendation system.