FTC probes OpenAI over potential violations of consumer protection laws

Jul 14, 2023, 2:50 PM UTC
4 mins read

OpenAI, the artificial intelligence company behind the creation of ChatGPT, is now under investigation by the U.S. Federal Trade Commission (FTC) over potential violations of consumer protection laws. The probe centers around allegations of data scraping and the dissemination of false information through OpenAI’s chatbot.

The Washington Post first reported the investigation after the FTC sent a comprehensive 20-page letter to OpenAI. The agency’s request seeks detailed information regarding OpenAI’s AI technology, products, customer base, privacy measures, and data security protocols. While the FTC declined to comment on the investigation, it appears they are examining whether OpenAI engaged in unfair or deceptive practices that could harm consumers or compromise privacy.

OpenAI’s founder, Sam Altman, expressed disappointment with the disclosure of the investigation as a “leak,” noting that this revelation undermines efforts to build trust. Nonetheless, Altman affirmed that OpenAI would cooperate fully with the FTC, emphasizing the company’s commitment to ensuring the safety and pro-consumer nature of its technology. Altman further stated that OpenAI prioritizes user privacy and designs its systems to learn about the world rather than individuals’ private information.

This investigation by the FTC represents a significant regulatory challenge to the rapidly growing AI industry. However, it is not the sole difficulty facing AI companies. Comedian Sarah Silverman and two other authors have filed a copyright infringement lawsuit against both OpenAI and Meta, the parent company of Facebook. The lawsuit alleges that these companies’ AI systems were illicitly “trained” using datasets containing unauthorized copies of the authors’ works.

Interestingly, OpenAI recently entered into a licensing agreement with The Associated Press (AP), involving the access and utilization of AP’s extensive news story archive. This partnership showcases OpenAI’s ongoing efforts to collaborate with reputable entities and enhance the capabilities of its AI technology.

Sam Altman has emerged as a prominent AI ambassador, testifying before Congress and embarking on a tour of European capitals to engage with regulators finalizing new AI regulatory frameworks. Altman has actively advocated for AI regulation, emphasizing concerns regarding potential existential threats, such as the hypothetical scenario of superintelligent AI systems turning against humanity.

However, some critics argue that excessive focus on these distant sci-fi narratives surrounding superpowerful AI might hinder the necessary actions against existing harms. They highlight the importance of addressing current issues related to data transparency, discriminatory behavior, and the potential for trickery and disinformation. Suresh Venkatasubramanian, a computer scientist at Brown University and former assistant director for science and justice at the White House Office of Science and Technology Policy, asserts that the fear surrounding AI is largely unfounded and distracts from pressing concerns.

The news of the FTC investigation into OpenAI broke shortly after a contentious hearing of the House Judiciary Committee, where FTC Chair Lina Khan faced off against Republican lawmakers accusing her of aggressive targeting of technology companies. Republicans voiced concerns over Khan’s alleged harassment of Twitter following its acquisition by Elon Musk, her arbitrary lawsuits against prominent tech firms, and her refusal to recuse herself from certain cases. Khan defended her position, arguing that increased regulation is essential due to the growth of these companies and the potential negative impact of tech conglomerates on the economy and consumers.

As OpenAI faces scrutiny from the FTC, the outcome of this investigation will have significant implications for the AI industry as a whole. It remains to be seen how this regulatory challenge will shape the future of AI development and implementation, and whether it will prompt the industry to address current concerns surrounding privacy, transparency, and consumer protection.

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