The Federal Trade Commission (FTC) is currently investigating Open AI for possible violations of Consumer Protection Law. The FTC is seeking extensive records from Open AI regarding its handling of personal data, its potential to provide users with inaccurate information, and the risks of harm to consumers, including reputational harm. This investigation could complicate Open AI’s relationship with policy makers, many of whom have been impressed by the company’s technology and its CEO, Sam Aldman.
The probe also brings further attention to Open AI’s role in the sprawling debate about the threat that generative artificial intelligence may pose to jobs, national security, and democracy.
In a 20-page investigative demand, the FTC has asked Open AI to respond to dozens of requests. These requests range from how Open AI obtains the data it uses to train its large language models to descriptions of ChatGPT’s capacity to generate false, misleading, or disparaging statements about real individuals. The FTC is also interested in Open AI’s testing, tweaking, and manipulation of its algorithms, particularly in different languages.
The FTC probe is a significant example of direct U.S. government regulation of AI. Lawmakers and Congress have been struggling to keep up with the rapidly evolving industry, and this investigation is expected to lead to new legislation affecting the sector. In contrast, European Union lawmakers are already finalizing landmark legislation that bans the use of AI for predictive policing and imposes restrictions on high-risk usage scenarios.
The FTC investigation follows the agency’s repeated warnings to businesses about making exaggerated claims about AI and misusing the technology in discriminatory ways. The FTC has made it clear that companies using AI will be held accountable for any unfair and deceptive practices linked to the technology.
FTC Chairlina Khan has argued that the agency’s existing Congressional mandate provides ample authority to prosecute the misuse of AI. While AI has the potential to turbocharge fraud and scams, Khan emphasized that existing rules still apply, and the FTC will vigorously enforce the laws it is charged with administering.
Open AI has faced criticism in the past, with complaints filed to the FTC regarding algorithmic bias, privacy concerns, and ChatGPT’s tendency to generate false information. Open AI has acknowledged the limitations of its products, including the possibility of nonsensical or untruthful content. They have also highlighted the potential for tools like GPT to lead to broad-based discrimination against minorities and other vulnerable groups.
