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FTC Opens Investigation Into Collaborations Using Generative AI

The generative AI investments and collaborations between Microsoft and OpenAI, as well as those between Google, Amazon, and Anthropic, are being closely examined by the U.S. Federal Trade Commission.

To have a better understanding of the partnerships’ “impact on the competitive landscape,” the FTC is looking into them closely, as stated in a press statement released on Thursday. The agency is particularly interested in learning about the collaborations’ practical effects and the competition for AI resources and inputs. According to the press release, FTC Chair Lina Khan stated the investigation will clarify whether or not dominant corporations’ pursuit of these kinds of alliances “risk distorting innovation and undermining fair competition.”

“History shows that new technologies can create new markets and healthy competition,” Khan stated. “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity.”

Director of the Competition Law Center at George Washington University William Kovacic stated that the FTC is sending a message that the agency is learning so that it will be prepared to act when more advances in the digital sector take place.

The takeaway is that we are not going to be bystanders; rather, we are watching and learning.

William Kovacic, Director, George Washington University Competition Law Center

“The message is: We are looking, we are learning, we’re not going to be spectators,” Kovacic stated. “We will not be playing catch-up.”

FTC investigation aims to expand the agency’s information base

According to Kovacic, the FTC is interested in learning more about what’s happening in the artificial intelligence space of the technology industry. He pointed out that since antitrust law’s establishment in the United States, it has been challenging to keep up with a rapidly evolving industry.

According to Kovacic, the FTC’s most recent investigation into the generative AI partnerships can be seen as policy research and development that enlightens the organization and empowers it to make wise decisions going forward.

“There’s been in many respects a chronic knowledge deficit that they seek to overcome,” Kovacic stated. “One of the most important ways to do that is to conduct studies that don’t necessarily wait for industry developments to fully mature, but to do them relatively early so that you get in on the ground floor of what’s taking place.”

The Information Technology and Innovation Foundation’s vice president, Daniel Castro, disagreed, saying he doesn’t think the FTC’s request is impartial. In addition to gathering information, he added, the FTC is warning industry entrepreneurs not to collaborate with large tech firms due to the possibility of an FTC investigation.

“They’ve clearly said big tech is in their crosshairs, and they’re willing to go after them even when they don’t have a solid legal basis because they want to try out new theories,” Castro stated.

From the day they got the order, the companies had forty-five days to reply.