OpenAI's ChatGPT Under Scrutiny: US FTC Examining Risks Of Harm To Consumers

The popular AI chatbot app ChatGPT, developed by OpenAI, is facing a potential legal threat as the Federal Trade Commission (FTC) is investigating whether it has caused harm to people by publishing false information about them.

ChatGPT utilizes artificial intelligence to generate content that closely resembles human language, but concerns have been raised about its accuracy and potential negative impact.

The FTC, in a civil subpoena sent to OpenAI and made public on Thursday (13 July), said that its probe of ChatGPT focuses on whether OpenAI has “engaged in unfair or deceptive practices relating to risks of harm to consumers, including reputational harm," reports The Wall Street Journal.

One specific inquiry from the FTC asks OpenAI to provide detailed information about the measures taken to address or mitigate the risks that the company's "large language model products could generate statements about real individuals that are false, misleading or disparaging".

This investigation by the FTC, led by Chair Lina Khan, represents a significant step up in the US federal government's involvement in regulating emerging technologies.

Khan reportedly said that the agency is concerned that ChatGPT and other AI-driven apps have no checks on the data they can mine.

“We’ve heard about reports where people’s sensitive information is showing up in response to an inquiry from somebody else,” Khan said.

“We’ve heard about libel, defamatory statements, flatly untrue things that are emerging. That’s the type of fraud and deception that we are concerned about," she added.

Critics of the FTC view this investigation as another foray into unfamiliar territory for an agency that has faced recent legal setbacks in its efforts to enforce antitrust laws.

Adam Kovacevich, founder of the industry trade group Chamber of Progress, questions whether the FTC has jurisdiction over cases where ChatGPT has caused reputational damage to individuals.

He said that it is not clear whether the agency should be involved in such matters. Kovacevich stated that issues like these fall under the category of speech regulation, which is beyond the FTC's authority.

OpenAI's CEO, Sam Altman, expressed disappointment with the FTC's request, but said that the company will work with the agency.

It is “disappointing to see the FTC’s request start with a leak and does not help build trust,” tweeted Altman on Thursday, referring to initial reporting about the subpoena.

Marc Rotenberg, president of the Center for AI and Digital Policy, filed a complaint with the FTC in March.

He acknowledged that the agency's jurisdiction over defamation might be unclear, but emphasised that misleading advertising is within the FTC's purview.

Additionally, he noted that disinformation related to commercial practices is already considered an area within the FTC's authority.

The complaint lodged against ChatGPT alleges that it is "biased, deceptive", and poses risks to "privacy and public safety" and argues that it satisfies none of the FTC’s guidelines for AI use.

The FTC holds extensive authority to regulate unfair and deceptive business practices that could harm consumers, as well as unfair competition.

However, some critics claim that the agency, led by Khan, has occasionally overstepped its authority. This was exemplified by a recent federal judge's decision to dismiss the FTC's attempt to block Microsoft's acquisition of Activision Blizzard.

During a US House committee hearing, Khan faced criticism regarding her agency's investigation into Twitter's privacy protections for consumers.

Republicans asserted that the probe was driven by liberal opposition to Elon Musk's control of Twitter and his relaxation of content-moderation policies.

Twitter on Thursday (13 July) also filed a request with a federal court to terminate a 2022 settlement it had reached with the FTC over alleged privacy violations, saying it had been subject to a “burdensome and vexatious enforcement investigation".

Khan responded that the agency was only interested in protecting the privacy of users and that it was taking all necessary measures to ensure Twitter's compliance with the order.

In its subpoena to OpenAI, the FTC has requested detailed information about the company's data-security practices.

One incident mentioned is from 2020, when OpenAI disclosed a bug that allowed users to access other users' chat information and some payment-related data.

The FTC's subpoena also covers other areas such as OpenAI's marketing efforts, AI model training practices, and how the company handles users' personal information.

The Biden administration has started exploring the need for regulations on artificial intelligence tools like ChatGPT.

As a first step, the Commerce Department issued a formal public request for comment in April, seeking input on what they term "accountability measures."

The White House's Office of Science Technology Policy is actively working on strategies to address both the benefits and potential harms of AI.

This includes leveraging AI to improve access to government services, while also addressing concerns such as increased hacking risks, potential discrimination by AI systems, and the disruptive impact of AI-generated content on elections.

Lawmakers from both parties, led by Senate Majority Leader Chuck Schumer, are prioritising the regulation of artificial intelligence in the current Congress.

Implementing new legislation or other measures to regulate AI is likely to take months, if not longer.

Lawmakers are also cautious about the potential impact of their actions on US innovation, as they recognise the need to compete with China in dominating the AI market.

The creators of ChatGPT have themselves called for increased government oversight of AI development.

In a hearing before Congress in May, Altman urged lawmakers to establish licensing and safety standards for advanced artificial intelligence systems.

During a Senate subcommittee hearing, Altman acknowledged the concerns people have about the impact of AI on their lives.

He emphasised that even though the technology holds great potential, it can also have disastrous consequences if not properly managed.

Altman has been actively traveling around the world, engaging in discussions about both the promises and dangers of AI.

His efforts have included meetings with prominent leaders such as French President Emmanuel Macron and Indian Prime Minister Narendra Modi.