WASHINGTON, DC – October 4: (L-R) Federal Trade Commission Chairman Lina Khan and Deputy Counsel … [+]
Last week's agreement The New York TimesThe agreement between the Federal Trade Commission and the Department of Justice paves the way for the Biden Administration to further strengthen antitrust scrutiny of the AI industry. The FTC previously launched an investigation into AI investments and partnerships between large technology companies and large AI companies. Now, the agencies are taking the next steps necessary to open investigations into specific transactions and companies.
The split would give the FTC oversight of OpenAI and Microsoft, while the DOJ has jurisdiction over Nvidia, and the FTC investigation is likely to look into Microsoft's investment in OpenAI. The New York TimesThe deal was structured to avoid antitrust scrutiny, and the Microsoft investigation may also look into the Inflection AI deal, which while similar to an acquisition, was structured differently than traditional methods.
It's unclear how much scrutiny the AI partnerships and investments between Amazon, Apple and Google will receive, or which agency will be responsible for oversight if it is deemed necessary. While these deals are closer to what the FTC would handle, the Department of Justice has led antitrust cases against Apple and Google over the past few years, and could require separate agreements in the future depending on how their current deals are structured.
Formal investigations have not yet begun at the FTC or DOJ. Last week's agreement merely paved the way for investigations to begin. Once launched, these investigations will likely last for months or even years, well beyond the November US presidential election. Given this timeline, the degree to which these cases are prioritized will depend on who occupies the White House as the next president.
If President Joe Biden is re-elected, FTC Chair Lina Khan and Assistant Attorney General for Antitrust Jonathan Cantor will likely remain in their current positions, especially if Republicans take control of the Senate. Whether they stay or are replaced by, perhaps, like-minded figures, pursuing these investigations into the AI industry will be a top priority for Biden's antitrust regulators. In Khan's view, the goal is to ” [they’re] Ask questions in a timely manner.”
There's a recognition between Khan and Kanter that earlier regulators were too lax when the current dominant tech companies were just getting started, and that they're only now facing antitrust lawsuits after they've established stronger positions that are harder to challenge. The AI industry's hope is to maintain “the opportunity for competition and the potential for disruption…” and not let this moment be hijacked by a handful of existing dominant companies, Khan added. Kanter made similar comments in a recent interview. Financial Times.
But if Donald Trump returns for a second term, there is growing uncertainty about the extent to which his administration will prioritize antitrust investigations into the AI industry. Trump's populist instincts could mean his administration will take a more aggressive stance than traditional Republican presidents. The Trump administration has launched investigations that have turned into antitrust lawsuits against Amazon, Apple, Google, and Meta, suggesting that Big Tech is likely to be a target if Trump returns to the White House.
Big tech companies are likely to face significant scrutiny, but the pressure under the Trump administration may be different from the past four years, with a focus on platforms censoring conservatives and banning individuals from the platform. In her first public appearance since assuming the post, FTC Chairman Melissa Holyoak, a Republican, called last month for the FTC to open an investigation into such practices by tech and financial platforms, building on the actions outlined in President Trump's May 2020 executive order. Holyoak's comments underscore the increased focus on the issue of censorship if Trump wins.
Still, some level of antitrust investigation into the AI industry is likely under a Trump administration, making it one of the few certain outcomes of this year's US presidential election. The key difference between Biden and Trump is not whether AI will be pursued, but the degree to which it will be prioritized, with the issue becoming more competitive as a top priority under a Trump administration. Of course, how much time and energy is spent on the issue will affect how quickly investigations escalate into litigation, and a more lax Trump administration may never complete an investigation or ultimately not challenge it.
