FTC Investigates OpenAI’s ChatGPT for Possible Consumer Protection Law Violations
The Federal Trade Commission (FTC) has shifted its attention to OpenAI’s ChatGPT, launching an investigation into whether the AI-powered chatbot has broken consumer protection laws. This comes after the FTC recently withdrew its in-house trial against Microsoft’s pending acquisition of Activision Blizzard.
In a 20-page demand letter, the FTC expressed concerns over OpenAI’s data security practices and the potential impact of ChatGPT on users’ reputations. The commission has requested detailed accounts of any complaints filed by users who have been provided with false information by the chatbot, leading to damage to their reputations. Additionally, a recent Stanford study revealed that ChatGPT’s performance has been declining over time, raising further concerns.
OpenAI, which received a multi-billion dollar investment from Microsoft earlier this year, has become a key player in the AI industry. Microsoft has integrated AI across its products and services, making it indirectly affected if the FTC’s probe into OpenAI finds any discrepancies.
The FTC’s primary role is to protect consumers from malicious practices, and in the past, companies like Meta, Zoom, and Twitter have faced significant fines related to privacy issues. AI models like ChatGPT and Bing Chat heavily rely on public and private data for training, necessitating a wider dataset due to their multiple usage purposes.
ChatGPT’s reliance on the GPT-3.5 model, which limits access to information up until September 2021, has been a setback. However, OpenAI recently introduced a new feature called Browse with Bing for iOS users, aimed at enhancing the search experience. To access this feature, users must have a ChatGPT Plus subscription.
The accuracy of chatbots like GPT-3.5 and GPT-4 is determined by user feedback and data. However, there have been reports of Bing Chat providing incorrect responses and even hallucinating. This has led to organizations expressing concerns about the technology and its use of their data without their knowledge, particularly due to security and copyright worries.
Data breaches have also affected ChatGPT. Earlier this year, hackers accessed over 100,000 ChatGPT credentials, which were subsequently sold on the dark web. The FTC investigation will examine OpenAI’s data storage practices, the measures in place to protect consumer data and reputational harm, and past security incidents that have affected the chatbot.
There is growing recognition of the need for rules and regulations governing the development of AI models. Industry leaders have called for a six-month hold on new developments to allow lawmakers to keep up with the ever-evolving sector. Microsoft’s CEO, Satya Nadella, emphasized the importance of aligning AI models with the real world, while also acknowledging the need for safety measures during a recent interview.
If the FTC’s investigation uncovers any wrongdoing by OpenAI, it could have negative implications for Microsoft. While the FTC cannot create new laws, it can provide recommendations to the US government to regulate AI model development. Restrictions on data access could significantly impact Microsoft’s chatbot, Bing Chat, and limit its accuracy.
The outcome of the FTC investigation remains to be seen, but it is clear that the current developments in AI call for the establishment of clear guidelines. As the technology continues to advance, striking a balance between innovation and consumer protection remains crucial.
