Michelle ThompsonThe FTC will investigate what rights the tech giants’ investments in AI businesses have granted, and whether those partnerships impair competition.
On Thursday, the United States Trade Representative started an investigation into investments and collaborations made by some of the largest businesses in the field of generative artificial intelligence.
The Federal Trade Commission (FTC) said in a statement that it has issued orders to five businesses, including Google parent company Alphabet, Amazon, Anthropic, Microsoft, and ChatGPT developer OpenAI, to submit information on the matter.
According to the agency’s statement, the investigation would focus on what authority and rights the tech giants’ investments in embryonic AI businesses bestowed, as well as if such partnerships harmed competition.
“Our research will shed light on whether dominant companies’ investments and partnerships risk distorting innovation and undermining fair competition,” FTC chair Lina Khan said in a statement. The British Competition and Markets Authority is pursuing a similar investigation.
The investigation is the agency’s first concrete effort to examine AI firms and their use of partnerships to broaden reach and influence in the rapidly growing industry.
Microsoft’s years-long work with OpenAI is the most well-known of the collaborations. Google and Amazon have just made multibillion-dollar investments in Anthropic, another San Francisco-based AI business founded by former OpenAI founders.
Microsoft’s Rima Alaily, vice-president of its competition law division, said in a statement: “The US has assumed a global AI leadership position because significant American companies are collaborating. Partnerships between independent companies, such as Microsoft and OpenAI, among many others, foster competition and accelerate innovation. We look forward to providing the FTC with the information it requires to finish its investigation.” The business has previously stated that OpenAI is not a subsidiary under its control, despite being OpenAI’s largest stakeholder following a $10 billion investment. Microsoft has an observer, non-voting position on OpenAI’s board.
Anthropic and Amazon declined to comment. Amazon, Google, and OpenAI did not immediately reply to requests for comment.
Khan, an antitrust researcher who has long advocated for increased enforcement against monopolies, has posed a challenge to big tech’s influence since her appointment to the FTC in 2021.
Under her leadership, the FTC successfully punished Amazon for privacy violations concerning its Ring doorbell camera, and in May 2023 reached a second settlement with the firm over charges that it violated children’s privacy rights by failing to remove recordings made by virtual assistant Alexa.
In previous lawsuits, such as the FTC’s case against Meta in 2021, the agency accused tech companies of anti-competitive behavior regarding competitor acquisitions. With Thursday’s announcement, the FTC has focused on the AI industry, where companies have chosen to expand investments in smaller enterprises rather than acquiring them outright.
“We’re looking into whether these ties allow dominant firms to wield undue influence or gain privileged access in ways that could undermine fair competition,” Khan said in his opening remarks to an AI symposium on Thursday.
