Top antitrust officials in the U.S. and Europe vowed to take on artificial intelligence, saying in a joint statement that they are "committed to using our available powers to address any such risks before they become entrenched or irreversible harms." (iStock.com/Dragon Claws)
"Given the speed and dynamism of AI developments, and learning from our experience with digital markets, we are committed to using our available powers to address any such risks before they become entrenched or irreversible harms," the agencies said as they noted the "inflection point" that AI represents, an inflection point they're determined not to let slip by unscrutinized as current officials contend happened with social media and other internet technology.
U.S. Department of Justice antitrust chief Jonathan Kanter, FTC Chair Lina M. Khan, European Commission Executive Vice-President Margrethe Vestager and CMA CEO Sarah Cardell identified three specific risks to competition in the AI space "requiring ongoing vigilance," especially into how AI business models shape corporate incentives.
The first risk was in a handful of companies gaining control over "key inputs" like data at scale and the specialized chips that AI runs on.
"This could potentially put a small number of companies in a position to exploit existing or emerging bottlenecks across the AI stack and to have outsized influence over the future development of these tools," the enforcers said. "This could limit the scope of disruptive innovation, or allow companies to shape it to their own advantage, at the expense of fair competition that benefits the public and our economies."
Then came the entrenching or extending of power in markets related to AI, with the statement asserting that AI models are developing at a time when "large incumbent digital firms" have already accumulated powerful advantages, often at "multiple levels related to the AI stack" that can give such firms control over distribution channels and services targeting businesses and people. "This may allow such firms to extend or entrench the positions that they were able to establish through the last major technological shift to the detriment of future competition," enforcers said.
Lastly, enforcers warned of "partnerships, financial investments, and other connections between firms" working on generative tools that could further amplify risks to competition. While those agreements aren't always harmful, the enforcers, who've been closely scrutinizing multiple AI-related deals and investments, said that in some instances "these partnerships and investments could be used by major firms to undermine or coopt competitive threats and steer market outcomes in their favour at the expense of the public."
According to the statement, the guiding principles for how enforcers will try to safeguard AI ecosystem competition are fair dealing that avoids "exclusionary tactics," consumer choice, and interoperability where different AI services and products can work with one another.
"Any claims that interoperability requires sacrifices to privacy and security will be closely scrutinized," they said.
"Businesses and consumers in the AI ecosystem will benefit if they have choices among diverse products and business models resulting from a competitive process. This means scrutinizing ways that companies may employ mechanisms of lock-in that could prevent companies or individuals from being able to meaningfully seek or choose other options," the enforcers said. "It also means scrutinizing investments and partnerships between incumbents and newcomers, to ensure that these agreements are not sidestepping merger enforcement or handing incumbents undue influence or control in ways that undermine competition."
Other potential competition concerns identified include the possibility that algorithms can facilitate traditional antitrust worries like the sharing of competitively sensitive information, price fixing and other collusion — enforcers and private plaintiffs are already closely scrutinizing, and in some cases pursuing, pricing algorithms accused of facilitating anticompetitive activity in everything from food to hotels to health insurance.
The statement also identified the risk of algorithms facilitating "unfair price discrimination or exclusion," a risk that dovetails with an independent, mandatory study the FTC launched on its own on Tuesday into technology that allows companies to tweak prices at the most granular level, potentially from individual consumer to individual consumer.
In addition to antitrust worries, the statement asserted that AI can "turbocharge" harms to consumers.
"Firms that deceptively or unfairly use consumer data to train their models can undermine people's privacy, security, and autonomy. Firms that use business customers' data to train their models could also expose competitively sensitive information," the enforcers said. "Furthermore, it is important that consumers are informed, where relevant, about when and how an AI application is employed in the products and services they purchase or use."
--Editing by Emily Kokoll.
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