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The rapid pace of innovation in artificial intelligence (AI) and other emerging technologies has raised regulatory questions around potential harms. The Federal Trade Commission (FTC), tasked with protecting consumers and promoting competition, has responded by enhancing its investigative capabilities for AI-related cases.Specifically, the FTC unanimously approved an omnibus resolution allowing staff to more readily issue civil investigative demands (CIDs) – a form of compulsory process similar to subpoenas – to companies developing or utilizing AI. This will streamline investigations into unfair or deceptive practices as well as anticompetitive behavior.
CIDs allow the FTC to legally compel the production of information and documents or sworn testimony from companies and individuals during investigations. As FindLaw explains, they function similarly to subpoenas but apply specifically to FTC inquiries under the Federal Trade Commission Act.Without the omnibus resolution, FTC staff would have needed full Commission approval to issue CIDs for each AI investigation. This new blanket pre-approval will remove that obstacle over the next decade across various areas like:
The FTC uses its Section 5 authority granted by Congress to protect consumers and promote competition. Areas where CIDs may uncover violations include:Unfair or deceptive practices
CIDs can help determine if companies have engaged in these sorts of unfair methods of competition or unfair or deceptive acts or practices banned under Section 5 – even if their conduct doesn’t violate antitrust laws.
While each CID is tailored to its investigation, they tend to seek similar categories of information like:
CIDs may also request documents, communications, market analyses, organizational charts, strategic plans, and other materials relevant to the inquiry.
Recipients have the right to petition the FTC to narrow or quash any CID they believe overreaches – though the Commission generally fights vigorously to enforce them. Barring legal objections, however, companies must comply.The FTC analyzes CID responses to determine if any Section 5 violations have occurred. If so, it has a range of enforcement options like:
For example, the FTC previously fined Facebook $5 billion and placed extensive restrictions on its data privacy program under a consent decree after a CID uncovered violations.
While this resolution equips the FTC to more nimbly investigate AI harms, some argue it’s an overreach. Critics contend issues like generative AI content moderation may be better addressed by lawmakers crafting tailored regulations rather than open-ended legal authorities. Complaints about the FTC exerting too much influence through guidance documents rather than formal rulemaking have also emerged.Yet many privacy advocates and academics praise the move as an important step toward meaningful AI accountability as Congress deliberates. Supporters believe preemptively probing emerging technologies through CIDs can reveal actual consumer harms in the real world – informing future policy proposals.The FTC warns that while AI like generative chatbots creates opportunities, its potential for misuse requires vigilance. As this debate continues, companies building or integrating AI should proactively assess risks and safeguards. Recipients of civil investigative demands must also respond thoroughly and seek legal counsel when needed to navigate inquiries.
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