Federal Trade Commission Chair Lena Khan said she is on alert for the use of abusive AI

Federal Trade Commission Chair Lena Khan testifies during the House Energy and Commerce Subcommittee hearing on Innovation, Data and Trade on the “Federal Trade Commission Budget for Fiscal Year 2020,” in the Rayburn Building on Tuesday, April 18, 2023.

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Chair Lena Khan wrote in a New York Times op-ed on Wednesday that the FTC is on alert for ways in which rapidly advancing artificial intelligence could be used to violate the antitrust and consumer protection laws it is charged with enforcing.

“Although these tools are new, they are not exempt from existing rules, and the FTC will vigorously enforce the laws we are managing, even in this new market,” Khan wrote, echoing a theme the agency shared in a joint statement with three Two more outlets last week.

In the opinion piece, Khan detailed several ways in which AI could be used to harm consumers or the market that she believes federal agencies should look out for. She also contrasted the current inflection point around AI with the early-mid 2000s era of technology, when companies like Facebook and Google changed communications forever, but with major implications for data privacy not fully realized until years later.

“What began as a revolutionary set of technologies has ended up concentrating enormous private power over key services and shutting down business models that come at an extraordinary cost to our privacy and security,” Khan writes.

But she said: “The course of the Web 2.0 era has not been predetermined – it has been shaped by a wide range of policy choices. We are now facing another moment of choice. And with the widespread use of AI, public officials have a responsibility to ensure this hard-won history is not repeated.” “.

According to Khan, one potential effect that law enforcement should look for is the impact of a small number of companies that control the raw materials needed to deploy AI tools. That’s because this type of control can enable dominant firms to leverage their power to exclude competitors, “selecting winners and losers in ways that further solidify their dominance.”

Khan also warned that AI tools used to set prices “can facilitate collusive behavior that leads to unfair price inflation – as well as forms of precisely targeted price discrimination.”

“The FTC is well-equipped with legal jurisdiction to deal with issues highlighted by the rapidly evolving AI sector, including collusion, monopoly, mergers, price discrimination, and unfair competition tactics,” she wrote.

Khan also warned that generative AI “risks turbo fraud” by creating authentic-looking messages. When it comes to scams and deceptive business practices, Khan said the FTC will look not only at “the fraudsters who rapidly deploy these tools but also the upstream companies that enable them.”

Finally, Khan said existing laws about the improper collection or use of personal data will apply to the big data sets on which AI tools are trained, and laws prohibiting discrimination will also apply in cases where AI has been used to make decisions.

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