The US Federal Trade Commission (FTC) and the Department of Justice’s Antitrust Division (DoJ) say that they will be scrutinizing the new field of artificially intelligent-powered tools for signs of anticompetitive behavior. The FTC Chair Lina Khan, and Justice Department Antitrust Head Jonathan Kanter spoke out about the topic at the joint Enforcers Summit. They raised concerns about large companies using AI’s economies-of-scale to crush competition.
Khan stated at the summit that machine learning relies on huge amounts data and requires a lot of storage. “We need to be vigilant to ensure that this isn’t just another site for big companies becoming larger and really squelching competitors,” Khan said according to . Khan warned that companies could “start panicking” about a disruption in the tech order, and “sometimes have to resort to anticompetitive techniques to protect their moats or protect their dominance.”
Kanter said that the current model for AI is “inherently dependent upon scale”, raising concerns about monopolization by large companies. Markets that are dependent on scale have a higher risk of being surrounded by barriers and deep moats. This is something that it’s crucial to understand.
The Generative AI market, which is a category of tools that produce text and images based upon user prompts, is dominated by giants like Google, Microsoft and Elon Musk. However, investors are starting expecting it will turn a profit. Companies may also need to refine and scrutinize their huge datasets in order to reduce the likelihood of unwanted output.
Particularly, the FTC has attempted to expand its authority in emerging tech industries that aren’t already semi permanently dominated primarily by incumbents. Khan claimed that Meta, the Quest VR headset maker, tried to block Meta’s purchase by Within, a VR app maker. Khan stated that this could allow Meta to compete more on software. We expect cases to be filed in traditional fields, including a massive suit against Amazon, but that’s for now.