Federal Trade Commission Investigates OpenAI for Possible Violations of Consumer Protection Laws
OpenAI, the developer behind ChatGPT, is currently under investigation by the Federal Trade Commission (FTC) over concerns regarding consumer privacy and potential inaccuracies in the information provided by the AI language model. The probe by the FTC could complicate OpenAI’s relationship with policymakers and draw further attention to the debate surrounding the risks posed by generative artificial intelligence.
In a 20-page investigative request, the FTC seeks detailed information from OpenAI regarding its data handling practices, including how it acquires the data used to train its language models. The request also asks for information about ChatGPT’s capability to generate false or misleading statements about real individuals, as well as any potential harm it may pose to consumers, including reputational damage.
The FTC’s investigative demand, considered to be an administrative subpoena, also includes a request for OpenAI to provide testimony on public complaints, ongoing lawsuits involving the company, and the 2020 data leak that exposed users’ chat histories and payment data temporarily.
Additionally, the FTC is interested in understanding how OpenAI tests, adjusts, and manipulates its algorithms, particularly in terms of generating diverse responses and addressing potential risks. The agency also wants clarification on OpenAI’s efforts to address hallucination, a term used to describe situations where AI systems generate false information.
This investigation marks a significant step in the direct regulation of AI by the US government, as policymakers seek to understand and regulate the rapidly evolving industry. While the US has fallen behind other global policymakers, such as the European Union, in terms of AI regulation, the FTC’s investigation demonstrates a commitment to tackling unfair and deceptive practices related to AI.
FTC Chair Lina Khan has asserted that the agency has the necessary authority to prosecute abusive AI practices under its existing mandate. Khan emphasized that while AI tools may be novel, they are not exempt from existing regulations, and the FTC will diligently enforce the laws it administers.
Critics have previously lodged complaints with the FTC, claiming that OpenAI’s products may be affected by algorithmic bias, privacy concerns, and a tendency to generate hallucinations, which could potentially violate consumer protection laws.
OpenAI has been transparent about the limitations of its products, cautioning that its models can produce nonsensical or untrue content and have the potential for discriminatory outcomes, particularly against minority or vulnerable groups.
The investigation by the FTC adds to the growing scrutiny surrounding OpenAI’s practices and highlights the need for comprehensive regulations in AI development and usage.
