FTC Initiates Probe into Big Tech’s AI Endeavors, Scrutinizing Deals and Collaborations

FTC Initiates Probe into Big Tech’s AI Endeavors, Scrutinizing Deals and Collaborations

In a significant move poised to scrutinize the artificial intelligence landscape, the U.S. Federal Trade Commission (FTC) has targeted key players in the tech industry. Companies at the forefront, including Amazon, Alphabet (Google’s parent company), Microsoft, along with AI specialists Anthropic and OpenAI, are now under the agency’s lens.

During a recent tech summit on AI, FTC Chair Lina Khan disclosed the beginnings of what is noted as a “market inquiry.” This investigation will delve into the burgeoning partnerships and investment patterns burgeoning between major cloud service providers and AI development firms.

Employing the powers vested by Section 6(b) of the FTC Act, the agency endeavors to dissect these corporate relationships independently from its law enforcement duties. The regulator’s scope of examination extends to compelling companies to submit detailed reports and respond in writing to queries regarding their operations.

Khan emphasized the importance of applying existing laws to the rapidly evolving AI sector, stating, “There’s no AI exemption from the laws on the books, and we’re looking closely at the ways companies may be using their power to thwart competition or trick the public.”

In a statement given to CNBC, a Google spokesperson highlighted Google Cloud’s commitment to transparency, contrasting it with practices of competitors known for customer lock-in strategies, now extending those tactics to AI services.

Rima Alaily, corporate VP of competition and market regulation at Microsoft, expressed the company’s view that independent partnerships, such as that of Microsoft and OpenAI, foster innovation and competitive dynamics. Microsoft anticipates cooperating with the FTC’s information requests to facilitate the study’s completion.

While Amazon and OpenAI withheld comments, Anthropic had not yet responded to CNBC’s inquiries.

FTC Initiates Probe into Big Tech's AI Endeavors, Scrutinizing Deals and Collaborations

This inquiry follows the FTC’s previous examinations, including a 2022 probe into pharmacy benefit managers and a 2020 study investigating unreported acquisitions by tech giants such as Alphabet, Amazon, Apple, Microsoft, and then-Facebook (now Meta).

The outcomes of the FTC’s current inquiry could have lasting implications on how AI technology is integrated, marketed, and regulated. As Khan noted, the approach to AI liability is still evolving, and insights from the FTC’s enforcement in other sectors will likely influence its strategy in navigating AI-related issues.

This investigation arrives amid broader discussions concerning the ethics, accountability, and impact of AI on society and industry competition. Consumer and data protection, privacy concerns, and the potential for anti-competitive behavior are central themes as regulatory bodies worldwide begin to address the complexities introduced by AI technologies.




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