What The FTC’s Focus on AI Competition Means for Ethical Data Use

Regulators Are Determined Not to Be Behind the Ball

A recent blog post from the Federal Trade Commission (FTC) made shockwaves when it raised anti-competitive concerns about the quickly evolving Generative AI ecosystem. The post doesn’t name the behemoths by name, but we all know who they are. The FTC specifically focuses on three general concerns surrounding the potential concentration of power: 

1. Controlling large data sets that are used to train large language models, 

2. Controlling engineering talent via non-competes, and 

3. Controlling high-performance computing power. 

Abusing any of these three components could result in history repeating itself: big tech companies using their power in harmful ways for consumers, businesses and society – and using their positions to not consider ethical data principles. Specifically, regulators were behind the ball with data privacy. GDPR and CCPA were critical, but they were largely reactive to a lot of damage that had already been done. 

With AI, we don’t have to be behind the ball. We can catch and address issues early, and the FTC, it seems, is trying to do that. And it’s becoming more and more clear that more than anything, they appear to understand these technologies, marking a major shift in historical regulatory discourse. This was made clear earlier this year when the FTC slapped healthcare companies including BetterHelp and GoodRx with multimillion-dollar penalties, accusing the companies of unfair and deceptive practices relating to their use of tracking pixels. They got it right on pixel-tracking, and it looks like they’re on the way to getting it right with AI. But time will tell.

“Federal Trade Commission building” by Flickr User Mr. Blue MauMau

Firms that are Good Data Stewards Need Not Worry

At the Ethical Tech Project, we talk a lot about the term Data Stewardship. This means that in order to achieve an ethical data ecosystem, companies must first be responsible stewards of people’s data and implement core ethical data principles at the firm level, including privacy, agency, fairness, transparency and accountability. In the FTC’s post, many of their concerns around potentially anticompetitive behaviors tie back to companies not being good stewards of data. But even if responsible data collection practices are in place, first-movers or incumbent firms’ control over data could additionally create “barriers to entry or expansion that prevent fair competition from fully flourishing” – which is why the agency’s enhanced focus on these activities is so critical. 

Another point the FTC briefly touched on is the also quickly evolving open-source Gen AI ecosystem and its potential to open up the playing field if they can reach parity with the quality of proprietary models. We agree, and it's why we developed ThePrivacyStack. The Privacy Stack is our open-source project for simple and clear privacy by design, a reference architecture for what the technical architecture for ethical data use should be.

Stay tuned for more on our concepts like Data Stewardship and our cornerstone initiatives such as ThePrivacyStack. 

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Here’s What We’re Reading on Ethical Tech This Week:

• How to Train Generative AI Using Your Company’s Data

• Artificial Intelligence Can’t Work Without Our Data

• Startups, VCs swarm Capitol Hill in generative AI lobbying push 

• Full Speed Ahead on A.I. Our Economy Needs It.