In an effort to keep pace with deceptive practices and competition concerns that have emerged with the rise of artificial intelligence (AI), the Federal Trade Commission (FTC) has approved a comprehensive resolution to streamline its use of civil investigative demands (CIDs) in the investigation of AI-generated products and services. This change is expected to enhance FTC's ability to address potential misuse of AI technology in various sectors.
The FTC made this announcement through a recent press release. According to an FTC press release issued on November 21, CIDs, a compulsory process, are akin to subpoenas. During an investigation, the FTC can issue a CID to obtain documents, information, and testimony.
In addition to explaining their legal instruments, the FTC also outlined their understanding and views about AI in the press release. According to the FTC press release, the agency recognizes that AI has beneficial uses; however, in wrongful hands, it can be misused for deceit or privacy infringement. It could also be utilized for gaining a market advantage especially if controlled by a select few.
In one of its blog posts dated June 29th, 2023, FTC further elaborated on some concerns related specifically to Generative AI. A post titled "Generative AI Raises Competition Concerns," published on the FTC's Technology Blog revealed that significant issues have emerged with the rapid advancement of generative AI. Generative AI produces text, photos, audio and video based on specific inputs. The blog post mentioned: "If controlled by one company or a few companies only then it could be used towards their benefit leading to distort competition in generative AI markets. Also if generative AI becomes increasingly critical those who control these inputs may wield outsized influence over significant economic activities."
The implications of this resolution have been analyzed and discussed in a National Law Review article. In the article titled "FTC Weighs in on Threats to Competition from Artificial Intelligence in Comment to U.S. Copyright Office," published by The National Law Review on November 27, it was stated that the resolution will allow a single commissioner to approve compulsory process requests. As pointed out by authors Kate E. Gehl and Paul R. Piaskoski of Foley & Lardner LLP, the practical effect of this resolution remains to be seen; however, businesses that could potentially be implicated should remain vigilant as FTC staff will now have an expedited ability to carry out compulsory process requests, which might increase the number and scope of investigations conducted by FTC.
