Joint Statement on AI Competition Released by Regulators

Published Date: 6/08/2024

Lina M. Khan, Chair, FTC. Generative AI foundation models (i.e. the pre-trained AI systems behind apps like OpenAI’s ChatGPT, Microsoft’s Copilot, Google’s Gemini and Meta’s Llama) are under scrutiny.

On 23 July 2024, the UK’s Competition and Markets Authority (CMA), the European Commission, the US Department of Justice (DoJ), and the US Federal Trade Commission (FTC) published a joint statement on competition in artificial intelligence (AI). The statement focuses on the risks to competition and consumers presented by generative AI foundation models and AI products.

  The joint statement was made by Margrethe Vestager, Executive Vice-President and Competition Commissioner, European Commission; Sarah Cardell, Chief Executive Officer, CMA; Jonathan Kanter, Assistant Attorney General, DoJ; and Lina M. Khan, Chair, FTC.

  Generative AI foundation models are so named because they act as the foundation for the development of more complex and sophisticated models. By using self-supervised learning and transfer learning, the models apply information learned about one situation to others, boosting accuracy whilst remaining cost-effective.

  The joint statement acknowledges that while these new AI services have great potential benefits, there are also clear risks that require ongoing vigilance. The Competition Authorities underlined their commitment to work to ensure effective competition and the fair and honest treatment of consumers and businesses, guided by their respective laws.

  The Competition Authorities consider that there are three chief competition risks posed by generative AI foundation models and AI products. Firstly, concentrated control of key inputs could allow some companies to exploit existing or emerging bottlenecks across the AI stack. Secondly, large incumbent digital firms could extend or entrench their positions by controlling the distribution channels of AI or AI-enabled services to people and businesses. Lastly, arrangements involving key players could undermine or subsume competitive threats.

  The Competition Authorities also note that AI can turbocharge deceptive and unfair practices that harm consumers. For example, firms that deceptively or unfairly use consumer data to train their models can undermine people’s privacy, security, and autonomy.

  To preserve competition and foster innovation, the Competition Authorities note that three common principles can be applied. Firstly, fair dealing is essential to prevent exclusionary tactics that can discourage investment and innovation by third parties. Secondly, interoperability is crucial to ensure that AI products and services and their inputs are able to interoperate with each other. Lastly, choice is essential to prevent companies or individuals from being locked into particular products or services.

  The joint statement represents a commitment by the four signatories to share knowledge and resources to combat the risks they describe. It is the second such agreement the UK has entered into after hosting the AI Safety Summit at Bletchley Park in November 2023.

  Whilst the UK’s bilateral agreements with the US and India appear to focus on growth, safety and mutual cooperation, this joint statement reads as a stark warning to firms with substantial market power in AI-related sectors. The main message of the Competition Authorities is that they are aware of the potential to engage in anti-competitive practices in these sectors, and they plan on robustly tackling any infringing businesses.

  Key AI players will need to be particularly careful when entering into partnerships and arrangements, and should avoid acting in ways that could be seen to be concentrating control of key inputs, or entrenching or extending market power in AI-related markets.

FAQS:

Q: What is the joint statement on competition in artificial intelligence about?

A: The joint statement is about the risks to competition and consumers presented by generative AI foundation models and AI products.

Q: Who are the Competition Authorities that published the joint statement?

A: The Competition Authorities that published the joint statement are the UK’s Competition and Markets Authority (CMA), the European Commission, the US Department of Justice (DoJ), and the US Federal Trade Commission (FTC).

Q: What are the three chief competition risks posed by generative AI foundation models and AI products?

A: The three chief competition risks are concentrated control of key inputs, entrenching or extending market power in AI-related markets, and arrangements involving key players that could undermine or subsume competitive threats.

Q: What principles can be applied to preserve competition and foster innovation in AI?

A: The three common principles are fair dealing, interoperability, and choice.

Q: What is the main message of the Competition Authorities in the joint statement?

A: The main message is that they are aware of the potential to engage in anti-competitive practices in AI-related sectors, and they plan on robustly tackling any infringing businesses.

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