DIGITAL PUBLIC ADMINISTRATION: THE ADMINISTRATIVE SUPREME COURT STATES THAT THE USE OF ALGORITHM IN ADMINISTRATIVE PROCEDURES IS LAWFUL IF KNOWABLE AND COMPREHENSIVE

28/01/2020

With judgment no. 8474/2019, the Administrative Supreme Court recognised the lawfulness of automated administrative procedures and indicated their limits and criteria. Furthermore, by binding the lawfulness of the algorithmic decision-making to the transparency of the automated procedure, the judgment opened a new scenario between the PA and companies owning intellectual property rights on software.

 

The Administrative Supreme Court returned to the question of algorithmic decision-making in the administrative sector with judgment no. 8474/2019 filed last 13th December 2019. The Administrative Supreme Court confirmed its position expressed in judgment no. 2270 of April 2019, expanding its argumentation and extending for the first time the possibility of algorithmic decision-making also to PA’s discretionary activities, provided that certain conditions are met.

The case
The present case concerned the adoption by the Ministry of Education, University and Research of an extraordinary recruitment plan (referred to in Law No 107/2015) entrusted to an algorithm, as a result of which the assignments and transfers of suitable teachers were calculated.
The outcome of the national mobility procedure, implemented by Ministerial Order no. 241/2016, was opposed by the teachers who had been placed in Phase C of the abovementioned extraordinary recruitment plan. Specifically, the applicants contested the outcome of the procedure carried out on the basis of an unknown algorithm, as a result of which transfers were ordered without taking into account the preferences expressed by the teachers.
This procedure was declared unlawful in first instance by the Regional Administrative Court of Lazio, because considered to be in clear contrast with the criteria regarding the use of Information Technology in administrative procedures.
The judgment was appealed by the Ministry of Education, University and Research before the Administrative Supreme Court, which confirmed the decision of the Regional Administrative Tribunal based on a different motivation.

The decision of the Administrative Supreme Court
The Administrative Supreme Court confirms the lawfulness of algorithmic decision-making in the public sector and set out in detail its limits and criteria.
The potential of the digital revolution – ASC remarks – must be exploited to ensure the efficiency and cost-effectiveness of Public Administration, also in light of the principle of good performance under Article 97 of the Constitution. These requirements must, however, be balanced with other fundamental principles of the administrative procedure, including the principle of transparency.
Among the elements of guarantee for the lawful use of the algorithm in administrative procedures, the Administrative Supreme Court mentioned:
(a) the full knowability of the algorithm used and the criteria applied;
(b) the imputability of the decision to the body of the PA holding the power, which must verify the logic and lawfulness of the choice and results delegated to the algorithm.
Thus, the judgment extends the PA’s responsibility to the verification of correspondence between the algorithm and the underlying legal rule. In order to be able to verify that the criteria, assumptions and outcomes of the robotized procedure comply with the requirements and purposes established by law, the algorithm must be knowable and comprehensible in all aspects: from the authors to the procedure used for its elaboration, to the decision mechanism including the priorities assigned in the evaluation and decision-making procedure and the data selected as relevant.
In the case at hand – ASC concludes – the Administration had postulated a coincidence between legal requirements and the algorithmic operation, which must always be demonstrated at a technical level and in relation to the concrete case, since the impossibility of understanding the functioning of the algorithm would result in an unlawful procedure.

A new scenario for IP rights holders
According to the above-mentioned decision, the relationship between software companies and Public Administration must be based on principles of transparency. Consequently, companies could not claim any confidentiality over the algorithm. The judgment is clear on this point: “companies’ claim for confidentiality could not be taken into account, since by placing these instruments at the service of the public power, they accept all the consequences in terms of transparency”.
It should be also noted that in a more recent case the Administrative Supreme Court stated that the holder of technical secrets is a counter-interested party pursuant to Article 22, paragraph 1, letter c) of Law no. 241 of August 7, 1990, since he holds an interest in contrast to those who request access to the algorithm in order to verify its correct functioning. The position as counter-interested party is justified because, in the case described, the disclosure of the algorithm can cause harm to the IP rights holder (see Administrative Supreme Court, division VI, judgment no. 30 of 2nd January 2020, in banca dati online De Jure).
These judgements open a new scenario for companies holding intellectual property rights in software and raise several questions concerning possible measures to guarantee confidentiality of technical secrets in administrative procedures. The fact that the algorithm must be knowable and comprehensible does not, indeed, result in a loss of copyright. More complex is the case of know-how, where the asset to protect is precisely secrecy.

Camilla Macrì and Luigi Goglia