Below is an essay on regulating AI. Hope you enjoy it. Big ups to Bloomberg News for publishing it.
Federal Trade Commission probes of anti-competition issues in the artificial intelligence industry raise the question of whether the FTC or the Department of Justice should be the agency with primary oversight of AI.
The DOJ is actually best equipped to monitor this burgeoning industry, in light of its experience scrutinizing Google’s search engine. Whereas the FTC’s role is narrow, the DOJ conducts and at times prosecutes an array of relevant civil and criminal investigations.
The two agencies have worked well splitting tech industry regulatory responsibilities during the Biden administration. After consulting on each case, the issues go through a clearance process, which leads to one of the two agencies ultimately receiving principal authority over the matters at hand.
The DOJ and FTC handle mergers and all antitrust issues this way. It is how the two agencies decided the DOJ would enforce the nation’s antitrust laws on all Google-related cases, and how the FTC would oversee Meta Platforms Inc. and Amazon.com Inc. However, the two agencies can’t seem to agree on which is best-suited to take the lead on AI.
Unlike the DOJ, pursuant to Section 6(B) of the Federal Trade Commission Act, the FTC can require an entity to file “annual or special, or both annual and special, reports or answer in writing to specific questions.” Further, the FTC can call for the investigated entity to provide information about conduct and market studies without litigation over a given company or industry necessarily being on the books.
But while these are powerful tools, they pale compared to the DOJ’s relevant (and superior) experience with AI. The DOJ also has jurisdiction over nonprofit entities. The FTC only holds such jurisdiction in limited, isolated circumstances.
The FTC’s restricted oversight authority over nonprofits will quickly become problematic, too, because at least one of the leading AI companies today—OpenAI—is organized as a nonprofit. The antitrust cop in charge of regulating AI shouldn’t have its hands tied in dealing with one of the industry’s major players.
Unlike the FTC, the DOJ already has extensive experience in AI-related matters because it took the lead for the US on anti-competitive issues related to internet search engines and related markets, such as tech industries that aren’t AI-related but may still be affected by AI. Given the DOJ’s experience with investigating and regulating the AI industry and search engine companies, it won’t have a steep learning curve.
Internet search engines are some of the earliest iterations of AI and machine learning. They use similar components, such as data, predictive algorithms, and cloud computing resources. If the FTC comes in from the ground floor now, it will have a lot of catching up to do. The time it takes to climb the learning curve could significantly impact its ability to stop the anti-competitive tactics emanating from within the sector.
The DOJ has more experience with AI. And given the amount of time that it has spent on Alphabet Inc.’s Google, it also best knows the company that industry experts most fear is attempting to use advanced AI products to cement its long-term market dominance.
Google has a history of engaging in anti-competitive practices to make its products the default option for consumers. For example, it spent more than $26 billion in 2021 to make itself appear as the default search engine across many browsers, phones, and other platforms.
It is fair to worry that the company will do the same with its Gemini AI chatbot. The DOJ’s years of experience in dealing with the search engine giant alone should be enough reason for it to take the lead on overseeing the AI industry. This doesn’t mean the DOJ and FTC can’t work together on AI, as they do in the antitrust field, but the DOJ is better suited to lead supervision and regulation.
Finally, the Biden administration signaled it would be prudent to undertake a whole-government approach to ensuring AI develops in accordance with US laws and national interests. The DOJ, an agency dedicated to protecting public safety, is a direct part of the executive branch and its priorities. The FTC—an independent agency—has a degree of separation and could choose to go in a different direction.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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