In a recent development, the Federal Trade Commission (FTC) has submitted a comment to the U.S. Copyright Office, raising several issues related to the development and deployment of Artificial Intelligence (AI) that implicate competition and consumer protection policy. The FTC has stressed its role in monitoring the impact of generative AI and enforcing the law as necessary to protect competition and consumers.

The FTC has expressed concerns about the manner in which companies are developing and releasing generative AI tools and other AI products. These practices raise concerns about potential harm to consumers, workers, and small businesses. The FTC has been exploring the risks associated with AI use, including violations of consumers’ privacy, automation of discrimination and bias, and turbocharging of deceptive practices, imposters schemes, and other types of scams.

Copyright and Consumer Deception

The FTC has an interest in copyright-related issues beyond questions about the scope of rights and the extent of liability under the copyright laws. For instance, consumers may be deceived when authorship does not align with consumer expectations. A consumer may think a work has been created by a particular musician or other artist when it is an AI-created product. 

Conduct that may violate the copyright laws may also constitute an unfair method of competition or an unfair or deceptive practice, especially when the copyright violation deceives consumers, exploits a creator’s reputation or diminishes the value of her existing or future works, reveals private information, or otherwise causes substantial injury to consumers.

Market Power of Dominant Firms

Certain large technology firms have vast financial resources that enable them to protect the users of their generative AI tools or exclusive licenses to copyrighted proprietary data. This potentially further entrenches the market power of these dominant firms. Accordingly, the FTC has been using its existing legal authorities to take action against illegal practices involving AI.

FTC’s Stand

The FTC has made it clear that there is no AI exemption from the laws on the books. It will vigorously use the full range of its authorities to protect Americans from deceptive and unfair conduct and maintain open, fair, and competitive markets.

The FTC’s comment to the U.S. Copyright Office underscores the importance of vigilance in the face of rapid technological advancements. It serves as a reminder that while AI has the potential to transform many industries and business practices, it must be developed and deployed responsibly, with due consideration for competition and consumer protection.