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Next On AI's Agenda, Regulatory Scrutiny

By Gretchen L. Jankowski and Abigail L. Cessna
December 01, 2023

There has been much hype around the potential of Artificial Intelligence (AI) to transform life and work. Many industries are looking to implement the paradigm shift that this technology offers. While companies are eager to develop and implement AI solutions, ensuring compliance with laws and regulations can help companies avoid costly and disruptive enforcement action.

While some jurisdictions are enacting or proposing AI-specific regulation, many existing regulatory frameworks apply to new technologies, including antitrust. Companies may experience different potential antitrust risks depending on the type of AI technology and their use of that technology. Generative AI, technology that generates text and images based on prompts, may be the most popular form of AI technology at the moment as it is accessible to the general public through programs such as ChatGPT. However, there are also other forms of AI technology — e.g., pricing algorithms. Competition concerns related to the development of AI include access to key inputs, network effects, and other unfair methods of competition. Concerns related to the use of AI depends on the use case.

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Generative AI

The Federal Trade Commission (FTC) identified a number of potential antitrust risks that generative AI technology poses. Data is a key input for training and developing generative AI models, and the FTC views data as a potential barrier to entry for some companies since larger, existing companies may have access to more data that they own vs. new players to the market. As the FTC highlighted, analyzing the harm to competition that generative AI can cause will be complex because there are different stages in the development of an AI model (pre-training and fine-tuning) and different companies may be responsible for development of each of these stages.

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