The US Federal Trade Commission (FTC) is conducting an investigation into OpenAI, the owner of generative artificial intelligence (AI) chatbot ChatGPT, for potential violations of consumer protection laws, as reported by Reuters on July 14. The probe focuses on whether OpenAI’s practices were unfair or deceptive, resulting in “reputational harm” to consumers. The FTC has issued a 20-page demand for records regarding OpenAI’s approach to addressing risks associated with its AI models. If the FTC determines that consumer protection laws were violated, it has the authority to impose fines or consent decree that governs the company’s data management practices.
The rise of generative AI has raised concerns about various issues, including copyright and data privacy. The FTC has received complaints about ChatGPT making “false, misleading, disparaging, or harmful” statements about individuals. In response to these concerns, the US government and Congress are working on new legislations to regulate the rapidly growing AI industry, with new regulations expected to be introduced in coming months. Other jurisdictions have also imposed stricter scrutiny on generative AI. In March this year, Italy’s data protection watchdog blocked access to ChatGPT due to violations of the European Union’s (EU) General Data Protection Regulation (GDPR). Similarly, Google had to delay the launch of its AI chatbot Bard in the EU following a request from the Irish Data Protection Commission for detailed privacy assessments.