FTC Initiates AI Market Inquiry Targeting Tech Giants

Published January 25, 2024

FTC Chair Lina Khan declared her agency's intent to probe into the business dealings of the most influential names in the artificial intelligence sector, such as Amazon, Alphabet, Microsoft, Anthropic, and OpenAI. This push was revealed on Thursday, during the FTC's tech summit emphasizing AI.

Scope of the FTC AI Inquiry

The investigation, known as a 'market inquiry', will scrutinize the myriad investments and partnerships between premier AI firms and significant cloud service providers. The FTC plans to exercise its 6(b) study powers, a reference to a section of the FTC Act that permits comprehensive research separate from the agency's traditional law enforcement functions. The authority enables the commission to make demands for civil investigations, compelling companies to submit detailed reports and written responses about various aspects of their operations.

Khan's Position on AI Regulation

Khan emphasizes that the fast-paced advancement and implementation of AI are front and center in the Commission's agenda, underscoring that AI technologies are not exempt from current laws. The FTC is particularly attentive to potential competitive barriers or deceptive practices that might involve AI. She notes the need for a clear regulatory framework around AI liability is still undecided. However, Khan expresses that the FTC's regulatory experience in other sectors will significantly shape its approach to AI.

In previous years, the FTC embarked on similar explorative studies in various domains. In 2022, an inquiry was conducted into the prescription drug intermediary industry, and in 2020, an examination into unreported acquisitions by tech behemoths including Alphabet, Amazon, Apple, Microsoft, and then-Facebook was undertaken.

FTC, AI, inquiry