admin
Last updated on March 23rd, 2024 at 10:35 am
The FTC will investigate the impact of tech giants’ AI investments on competition and the rights conferred by those deals
On Thursday, the United States trade regulator initiated an investigation into investments and partnerships made by major companies in the field of generative artificial intelligence.
The Federal Trade Commission (FTC) has issued orders to five companies, including Alphabet (Google’s parent company), Amazon, Anthropic, Microsoft, and OpenAI, requiring them to provide information on their investments and partnerships in the field of generative artificial intelligence, as stated in an FTC statement.
The inquiry will investigate the authority and rights that these tech giants’ investments in emerging AI companies have granted them, and whether these deals pose a threat to competition, according to the agency’s statement.
FTC Chair Lina Khan stated, “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.” The British Competition and Markets Authority is conducting a similar examination.
The inquiry marks the FTC’s initial effort to examine AI firms and their utilization of partnerships to broaden their reach and influence in the swiftly expanding industry.
Microsoft’s longstanding partnership with OpenAI is the most well-known among these collaborations. Google and Amazon have recently struck multibillion-dollar deals with Anthropic, another San Francisco-based AI startup founded by former OpenAI leaders.
Rima Alaily, Microsoft’s vice president of its competition law group, stated, “The US has taken a leading role in global AI because key American companies are collaborating. Partnerships between independent companies like Microsoft and OpenAI, among others, are fostering competition and expediting innovation. We are eager to provide the FTC with the necessary information for its study.” Microsoft has previously stated that OpenAI is not a subsidiary under its control, despite being OpenAI’s largest shareholder following a $10 billion investment. Microsoft holds an observer, non-voting seat on OpenAI’s board.
Anthropic and Amazon chose not to comment. Amazon, Google, and OpenAI did not respond immediately to a request for comment.
Khan, an antitrust expert advocating for increased enforcement against monopolies, has posed a threat to the power of big tech since her appointment to the FTC in 2021.
Under Khan’s leadership, the FTC fined Amazon for privacy violations related to its Ring doorbell camera and settled a separate case in May 2023, alleging the company violated children’s privacy rights by not deleting recordings from the virtual assistant Alexa.
In previous complaints, such as the FTC’s case against Meta in 2021, the agency accused tech giants of anti-competitive behavior regarding acquisitions of competitors. With the recent announcement, the FTC is now focusing on the AI sector, where companies are choosing to invest more in smaller firms rather than acquiring them outright.
“We are examining whether these relationships allow dominant companies to exert undue influence or gain privileged access in ways that could undermine fair competition,” Khan said during an AI forum on Thursday.
