In a recent move, U.S. President Joe Biden signed an executive order aimed at addressing the potential harms associated with the misuse of artificial intelligence (AI). The order directs the administration to establish a new chief AI officer, monitor companies developing powerful AI systems, implement stronger privacy policies, and ensure the deployment of AI is free from bias. This initiative also includes the creation of safety guidelines and industry standards to govern the use of AI.
One of the key areas of focus highlighted in the executive order is the application of antitrust laws to combat AI-related abuses. Antitrust measures will be used to scrutinize various business practices, such as pricing strategies, mergers, and actions by dominant firms, particularly in the tech sector. The goal is to prevent anticompetitive behavior stemming from the misuse of algorithms and AI technologies.
President Biden emphasized the need to crack down on anticompetitive practices driven by algorithms in his recent State of the Union address. The misuse of AI algorithms to manipulate prices, particularly in the real estate sector, has raised concerns about unfair competition and consumer harm.
As AI continues to play an increasingly significant role in business operations, executives must be aware of the legal risks associated with training AI models. Providing data to AI systems can potentially lead to legal issues, including antitrust violations, copyright infringement, data privacy breaches, and discrimination concerns.
The executive order acknowledges the dual nature of AI, recognizing its potential for positive impact while also acknowledging the risks it poses. To address competition-related challenges, the order emphasizes the importance of antitrust enforcement to prevent market distortions and unfair practices.
The Department of Justice (DOJ) and the Federal Trade Commission (FTC) are tasked with enforcing antitrust laws related to AI practices. Current enforcement efforts are focused on addressing algorithmic collusion, where firms may use AI algorithms to coordinate pricing strategies without explicit agreements.
Recent cases involving alleged collusion through AI algorithms have drawn government attention, with the DOJ and FTC closely monitoring developments. While algorithmic pricing presents challenges in detecting anticompetitive behavior, it also offers benefits such as improved consumer offerings and pricing efficiency.
Regulators are navigating the complexities of AI technology to strike a balance between deterring abuses and promoting the beneficial use of algorithms in fostering healthy competition.
