From JD Supra:
The U.S. Federal Trade Commission (FTC) staked out its role in policing the potential competition and consumer protection implications of generative AI technologies’ use of copyrighted materials in comments submitted in the U.S. Copyright Office’s proceeding on AI and copyright. The proceeding seeks information on the use of copyrighted works to train AI models, levels of transparency and disclosure needed regarding copyrighted works, and the legal status of AI-generated outputs, among other things. In its comments, the FTC reiterated its expertise addressing competition and consumer protection issues involving AI, identified copyright issues related to generative AI that implicate competition and consumer protection policy, and introduced testimony from an October 2023 FTC roundtable with creative professionals. The FTC also promised vigorous efforts to protect consumers in the rapidly evolving AI marketplace.
The FTC’s AI Enforcement
The FTC’s mandate – under the FTC Act and other statutes – to promote competition and protect consumers gives it the power to address unfair or deceptive acts or practices and unfair methods of competition. The FTC has characterized AI as the latest in a series of new technologies that pose novel and important challenges for consumers, workers, and businesses, which falls within the purview of the FTC’s “economy-wide mission.” According to the FTC, as companies deploy AI-enabled systems across a wide range of industries and people incorporate AI-powered products and services into their daily lives, the potential for harm to consumers increases.
The FTC has experience applying its existing legal authority to address alleged unlawful practices and unfair competition involving AI. Prior actions and guidance have addressed a variety of consumer protection allegations, such as algorithms that rely on consumer’s personal information, algorithm-driven recommendations communicating deceptive claims, and algorithms making biased decisions. The FTC has also called attention to potential advertising concerns relating to AI, and has highlighted the risk of fraud stemming from the use of chatbots, deepfakes, and voice clones.
Consumer Protection, Competition, and Copyright
In its comments to the Copyright Office, the FTC highlights important intersections across consumer protection, competition law and policy, and copyright law and policy. The Commission’s comments note three areas of interest where the FTC might seek to address unfair or deceptive practices to ensure a competitive marketplace.
First, the FTC notes that decisions about where to draw the line between human creation and AI-generated content may cause harm to both creators and consumers. Creators may be harmed by their work being used to train an AI tool without their consent. Consumers, on the other hand, may be harmed if there is a lack of transparency about AI authorship.
Second, the FTC argues that questions about how to address liability for AI-generated content can implicate consumer protection and competition policy. These questions include what liability principles should apply, assigning and apportioning liability, treatment of pirated content, and the role of disclosures, among other issues. As policymakers seek answers to these questions, there may be overlap and potentially some conflict with consumer protection or competition interests. For example, as the FTC notes, “the use of pirated or misuse of copyrighted materials could be an unfair practice or unfair method of competition under Section 5 of the FTC Act.”
Third, the FTC argues that consumer protection and competition principles may call for policy protections that “go beyond the scope of rights and the extent of liability under the copyright laws.” There may be times when consumer protection or competition policy and copyright policy are aligned, as in the example above where misuse of copyrighted materials would likely violate both the FTC Act and copyright law. The FTC raises the possibility, however, that there may also be circumstances where companies run afoul of Section 5 with their AI-generated content even if that content would not violate copyright law.
Impact of Generative AI on Creative Economy
The FTC also seeks to highlight impacts on content creators. Along with its written remarks, the FTC submitted the transcript of its October 4, 2023, “Creative Economy and Generative AI” roundtable, which featured musicians, authors, actors, artists, software developers, and other creative professionals discussing the impact of generative AI on their work. The FTC transcript noted views shared by participants on topics such as: (1) works being used to train generative AI without participants’ consent; (2) insufficient or ineffective mechanisms for obtaining consent, including reliance on opt-out approaches; (3) lack of transparency and disclosure about training data and authorship of AI-generated content; (4) the ample use cases of AI for creative professionals but the need for better guardrails to protect creators; and (5) the putatively great power imbalance between the creators and the generative AI companies.
Link to the rest at JD Supra
PG is anything but an expert on the FTC’s jurisdiction, but color him skeptical about whether the agency has jurisdiction over Generative AI programs.
PG did some quick and dirty research and found the FTC has about 1000 people on its payroll, about two-thirds of whom are attorneys. As PG has mentioned on multiple occasions, he’s a retired attorney and has high regard for the general intelligence of his fellow attorneys.
However, with the exception of patent attorneys, who must have an undergraduate degree in the science or engineering fields, a large portion of the bar members anywhere PG knows about have non-science or engineering or math degrees as undergraduates. Indeed, law school is one of the few options for a humanities major who would like to be able to support a family in a reasonably comfortable manner.
In short, the people working at the FTC undoubtedly have a lot of opinions about artificial intelligence, but little ability to understand how it works or what dangers are real and what dangers are imaginary. The fact that judges are all attorneys gives PG another reason to worry about involving AI research in the US legal system.
Here’s a statement from the FTC website about the agency’s mission:
The FTC enforces federal consumer protection laws that prevent fraud, deception and unfair business practices. The Commission also enforces federal antitrust laws that prohibit anticompetitive mergers and other business practices that could lead to higher prices, fewer choices, or less innovation.
Whether combating telemarketing fraud, Internet scams or price-fixing schemes, the FTC’s mission is to protect consumers and promote competition.
Perhaps PG missed something, but telemarketing fraud, internet scams or price-fixing schemes don’t sound like the main features of large language models.