More information needed about the contentious AMS algorithm

The AMS Algorithm: Challenges in Admissibility and the Role of Automated Labor Market Assistance

The AMS algorithm, which was designed to help unemployed individuals determine their labor market prospects, has faced challenges in its admissibility. The Administrative Court (VwGH) has ruled that the digital tool must undergo further clarification before it can be used nationwide.

The Labor Market Assistance System (AMAS) was set to be introduced in Austria at the beginning of 2021, but was stopped by the data protection authority in August 2020 due to concerns about legal basis and prohibited individual decisions (“profiling”). The Federal Administrative Court overturned the decision, leading to a challenge at the Administrative Court, which made a decision after almost three years.

The AMS aimed to make unemployment support more efficient by using a computer algorithm to divide unemployed individuals into categories with high, medium, and low labor market opportunities. However, the responsible advisors would still have the final say on decisions such as whether someone should receive expensive skilled worker training or not.

The Court certified that the algorithm is in the “significant public interest” – a prerequisite for justifying the use of personal data. However, it also confirmed the existence of so-called “profiling,” which raises questions about admissibility. The decision of AMS employees about job seekers may be largely determined by automatically calculated labor market opportunities. If this is true, a separate legal basis would need to be created for this use of personal data.

The Federal Administrative Court did not address this controversial issue directly, leaving it up to a new procedure to clarify further before the program can be used nationwide. The AMS is currently reviewing its decision and considering its next steps.

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