FTC investigates Amazon, Alphabet, Microsoft for AI investments and partnerships

The Federal Trade Commission (FTC) has announced that it will be conducting a comprehensive study on major players in the artificial intelligence (AI) field, including Amazon, Alphabet, Microsoft, Anthropic, and OpenAI. The announcement was made by FTC Chair Lina Khan during the agency's tech summit on AI. Khan referred to the study as a "market inquiry" into the investments and partnerships formed between AI developers and major cloud service providers.

This study will be conducted under Section 6(b) of the FTC Act, which grants the regulator the authority to investigate companies and make civil investigative demands. The FTC can order companies to submit specific reports and answer questions about their businesses. The purpose of this inquiry is to examine how these AI companies may be using their power to hinder competition or deceive the public. Khan emphasized that there is no exemption for AI from existing laws, and the FTC intends to closely scrutinize the actions of these companies.

This is not the first time the FTC has launched a study of this nature. In 2022, the agency launched a similar inquiry into the prescription drug middleman industry, and two years prior, it conducted a study into past acquisitions by Alphabet, Amazon, Apple, Microsoft, and Facebook (now Meta). In both cases, the companies were required to provide information about their practices and previous acquisitions that were not reported to the antitrust agencies.

Khan acknowledged that the future liability regimes for AI are still uncertain, but stated that the FTC's enforcement experience in other domains will guide its approach to this work.

The FTC's decision to conduct this study comes amidst increasing scrutiny of the power and influence of tech giants, particularly in the AI sector. Regulators are keen to ensure that competition is not stifled and that consumers are not being misled or harmed. The FTC's investigation will shed light on the business practices of these AI heavyweights and may potentially lead to regulatory action in the future.


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