The FTC is concerned about consumer protection, data handling and the potential risks associated with the company’s AI technology.
07/14/2023 1:35 P.M.
2 minute read
OpenAI, the creator of ChatGPT, is facing an investigation by the Federal Trade Commission over potential violations of consumer protection law, according to a recent article from CNN.
The FTC’s investigation aims to shed light on OpenAI’s handling of personal data, the accuracy of information provided by its AI models, and the risks of harm to consumers, including reputational damage.
The FTC’s 20-page investigative demand released this week calls for extensive records from OpenAI, covering a wide range of topics. The requests include details on how the company acquires the data used to train its language models, information about ChatGPT’s capacity to generate false or misleading statements about individuals, and descriptions of any complaints or lawsuits involving OpenAI. The demand also focuses on OpenAI’s algorithm testing, manipulation and steps taken to address cases of “hallucination,” where the AI produces false information.
This investigation potentially complicates OpenAI’s relationship with policymakers, who have previously been impressed by the company’s technology and its CEO, Sam Altman. “It also could focus further attention on OpenAI’s role in a sprawling debate about the threat that generative artificial intelligence may pose to jobs, national security and democracy,” according to the article.
The FTC’s investigation follows the agency’s warnings to businesses against making exaggerated claims about AI or using the technology in discriminatory ways. The FTC has emphasized that companies using AI will be held accountable for any unfair or deceptive practices associated with the technology. As the leading consumer protection moderator in the U.S., the FTC possesses the authority to prosecute privacy abuses, misleading marketing and other harmful activities.
“The FTC probe is the clearest example yet of direct U.S. government regulation of AI, as lawmakers in Congress struggle to get up to speed on a rapidly evolving industry ahead of an expected push this fall to draft new legislation affecting the sector,” writes CNN reporter Brian Fung. “U.S. efforts have largely lagged behind other global policymakers. European Union lawmakers, for example, are barreling toward finalizing landmark legislation that bans the use of AI for predictive policing and applies restrictions to high-risk usage scenarios.”
FTC Chair Lina Khan asserts that the agency’s existing congressional mandate grants sufficient authority to prosecute abusive uses of AI. Khan maintains that although AI tools are novel, they are not exempt from existing rules, and the FTC will vigorously enforce the laws governing them.
OpenAI has previously acknowledged some limitations of its products, such as the potential for nonsensical or untruthful content generation in relation to certain sources. The company has also addressed concerns about algorithmic bias, privacy and the risk of broad-based discrimination against vulnerable groups.
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