IP Law Daily, TECHNOLOGY/INTERNET NEWS: FTC Chair Khan says U.S. at key decision point with respect to generative A.I., (May 3, 2023)

By Justin Marcus Smith, J.D.

Khan said novel AI technology is not exempt from existing rules, and the FTC will vigorously enforce the laws it is charged to administer.

FTC Chair Lina Khan said the U.S. must make the right policy choices to mitigate the array of risks that generative AI poses to the economy, competition, and personal security and privacy. Khan aired her views in a New York Times opinion piece published on May 3. Khan outlined that the U.S. must draw on its “hard-learned” experiences grappling with “Web 2.0” innovations that led to the widespread hoarding and sale of personal data and other troubling effects.

Khan emphasized the disruptive effects of innovation stemming from the last wave of widespread techno-social change, the “Web 2.0” era of the mid-2000s. She acknowledged that although Facebook, Google, and others had revolutionized communications by delivering popular services, the innovations came with steep unanticipated costs. Extensive private surveillance, in particular, monetized what the public initially viewed as free services. One result was the widespread hoarding and sale of personal data that eroded personal privacy and security, for example, by enabling fraud. Khan urged those effects were not inevitable. Rather, they were the result of a broad range of policy choices. She said public officials have a responsibility to ensure history does not repeat with respect to AI.

To that end, Khan said the FTC is taking a close look at how to balance and promote fair competition while protecting Americans from unfair or deceptive practices. Again, referencing the “mass exploitation” aspects of Web 2.0, she said innovation is “not exempt” from existing laws and rules. She warned the FTC will “vigorously enforce” the law.

Incipient risks. Khan outlined several risks in connection with the new wave of AI technology. These include:

• Further locking in of large incumbent technology firms’ market dominance by exclusion or discrimination of downstream rivals and private “picking of winners and losers”;

• Facilitation of collusive behavior that unfairly inflates prices, including “forms of precisely targeted price discrimination”;

• “Turbocharging” of fraud, such as scammer and chatbot uses of AI that are already facilitating fraud and extortion on a massive scale through exploitation of idiosyncratic personal information gleaned from social media posts;

• Automation of discrimination through data error, dataset bias, and, again, exploitation of sensitive personal data, posing a risk of unfairly locking people out of jobs, housing, and key services.

In contrast to the “cautionary tale” of the early 2000s, Khan noted how antitrust scrutiny of IBM in the late 1960s led to the unbundling of IBM software and hardware. This, she argued, catalyzed the rise of the American software industry and trillions of dollars in economic growth. She said requiring AT&T to open its patent vault led to similar benefits with the “expansion of countless young firms.” Khan concluded that the U.S. could continue to be a world leader in technology “without accepting race-to-the-bottom business models” if it makes the right policy choices now.

News: CyberPrivacyFeed DataPrivacy IndustryNewsTrends TechnologyInternet