FTC Probes Big Tech and GenAI Partnerships’ Impact on Competition

The Federal Trade Commission has begun an inquiry into investments and partnerships in the generative artificial intelligence sector.

The regulator has ordered Google parent company Alphabet, Amazon, Anthropic, Microsoft and OpenAI to provide information about these activities as it investigates the impact these relationships may have on the competitive landscape, the FTC said in a Thursday (Jan. 25) press release.

The inquiry aims to ensure that companies that are developing and monetizing AI are not using tactics that hinder the creation of new markets and healthy competition, FTC Chair Lina M. Khan said in the release.

“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” Khan said.

The information gathered from these orders may inform future actions taken by the FTC, according to the release.

Specifically, the FTC is seeking details about agreements, strategic rationales, practical implications, competitive impacts, competition for AI inputs and resources, and any information shared with other government entities, the release said.

The actions that the FTC is looking at include the extension of the partnership of Microsoft and OpenAI, the strategic collaboration of Amazon and Anthropic, and the expansion of the tie-up of Google and Anthropic, per the release.

The companies that received the orders must respond within 45 days of receipt, per the release. The FTC voted unanimously to issue the orders and conduct the study.

Khan said in March that the FTC was keeping an eye on the AI industry, aiming to ensure that the field isn’t dominated by existing Big Tech companies and that the claims companies make about what AI products can do are not overstated.

Because machine learning requires a huge amount of data and storage, there is a potential that this demand could cause “big companies to become bigger,” Khan said at the time.

European regulators are also reviewing whether Microsoft’s involvement with OpenAI warrants further investigation. The European Commission said Jan. 9 that it is inviting businesses and experts to share competition issues that they’ve seen in the AI sector.

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