 "artificial intelligence, Ai")
Stephen Hawking once famously said, 'AI is likely to be the best or worst thing to happen to humanity'. Artificial Intelligence (AI) is ushering in a new era of innovation, transforming economies and businesses across the globe, including India. Traditionally known for its agriculture and service-driven economy, it is rapidly evolving into an AI-based economic powerhouse, harnessing the potential of AI to drive growth, enhance competitiveness, and foster technological advancement. ChatGPT etc., are becoming indispensable tools for professionals and businessmen. However, it is also opening new areas for antitrust scrutiny.
AI and Antitrust
As India's economy and businesses undergo a profound AI transition, the implications of Competition law are also becoming increasingly concerning. AI-driven technologies are not only redefining market dynamics but also raising complex techno-legal and regulatory challenges. To explore the intricate interface between competition law and AI, it is imperative to consider the insights of experts.
AI technologies have the potential to disrupt traditional markets, affect market dynamics, and raise unique competition concerns, like – (i) Collusion: AI-driven algorithms can automatically set prices and coordinate strategies among competing firms. Detecting and preventing collusion in the AI era present intricate challenges for competition authorities. (ii) Dominance: Tech giants with significant AI capabilities can gain a competitive advantage, raising concerns about monopolistic behaviour and abuse of market power, often difficult to detect. (iii) Algorithmic Bias: AI can perpetuate bias and discrimination, posing ethical and legal challenges that competition authorities must address. (iv) Big Data: The use of AI often involves vast amounts of data, leading to privacy and security concerns.
When risks for consumers rise, competition regulators investigate theories of harm to price, quality, consumer welfare and public good.
Although most competition regulators haven't extensively initiated antitrust cases against AI companies, in a first, the US Federal Trade Commission (FTC) started an expansive investigation against Open AI, the creator of ChatGPT, for violation of consumer laws and alleged data leaks.
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White House's Executive Order
President Joe Biden's Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence, issued on October 30, is a comprehensive policy directive aimed at shaping the development and deployment of AI in the US. This order acknowledges the potential benefits of AI while highlighting the significant risks and challenges associated with the technology. It outlines a series of actions to promote the responsible and ethical use of AI. The Executive Order sets out new standards for AI safety and security. The order calls for rigorous standards for testing AI systems before their public release. It directs actions to ensure responsible government deployment of AI, emphasizing the importance of AI in modernizing federal infrastructure. This includes guidance for agencies on AI use, improved procurement, and the acceleration of AI professional hiring.
The Executive Order on AI has profound implications for various sectors, including technology, healthcare, government, and, notably, the legal sector. Legal professionals must prepare for an increased demand for counsel related to AI, including compliance, liability, intellectual property, and ethics. Additionally, lawyers themselves will be impacted as they integrate AI into their practice for tasks such as document review, research, and analysis.
Balancing Innovation and Competition
Biden's Executive order has highlighted the role of innovation and competition. It aims to maintain leadership in AI innovation, supporting research and development through the National AI Research Resource and providing grants for key areas such as healthcare and climate change. These initiatives can also have implications for Competition Law by addressing market dynamics.
AI Safety Summit
The government of the UK convened the world's first AI Safety Summit on 1st November, which was also attended by India, and a Bletchley Declaration was signed by the European Union and 28 countries to establish a shared understanding of opportunities and risks posed by AI. This brought together global CEOs of AI companies and global governments. UK PM Rishi Sunak stressed that for a better-shared understanding, governments must keep a check on developments of AI. A State of AI Science report was also released at the Summit.
India's upcoming GPAI Summit
India will be holding its upcoming GPAI (Global Partnership on Artificial Intelligence) 2023 Summit in Delhi on 12-14 December, being organized by MeitY. The GPAI Summit will bring together experts from science, industry, civil society, governments, international organizations and academia to foster international cooperation on the future of artificial intelligence and its impact on society, focusing on various critical aspects of AI, including responsible AI, data governance, future of work and innovation and commercialization.
CCI's Market Study on AI
The CCI's recent announcement to conduct a market study on AI reflects a growing recognition of the technology's impact on competition and its potential anti-competitive implications in India. Market studies will provide the CCI with insights into the dynamics of AI adoption in India and help identify practices that could harm competition.
Way Forward
To effectively address the complex challenges at the intersection of competition law and AI, it is imperative for competition authorities to take proactive measures. It is necessary to invest in building in-house expertise in AI, enabling them to understand the nuances of AI technologies and their implications for competition. Collaboration is another crucial element, we must work closely with other regulatory bodies, international partners, and experts to develop comprehensive and consistent approaches to AI regulation. Regulators should issue guidelines and recommendations for businesses on the responsible use of AI and avoiding anti-competitive practices. Regular assessments of the market impact of AI, especially in sectors with high AI adoption, are essential to detect and prevent anti-competitive behaviour promptly. Proactive enforcement actions against AI-driven anti-competitive practices, such as collusion or monopolistic behaviour, are vital to maintaining fair competition. It is relevant to propel coordination with data protection authorities to ensure AI usage aligns with data privacy laws and respects individuals' privacy rights.
This multifaceted approach is necessary to navigate the intricate interface of artificial intelligence and Competition Law, allowing competition authorities to adapt to the evolving challenges and opportunities unfolded by AI in various sectors like governance, health, education, law administration, agriculture, defence, urban development, art and culture, environment etc. The interface of Competition Law and AI is a dynamic and rapidly evolving area that requires a proactive, fast and nuanced approach to ensure that competition remains fair, innovation thrives, and the potential benefits of AI are harnessed while addressing its challenges.
(Dhanendra Kumar is formerly Executive Director at the World Bank for India, Sri Lanka, Bangladesh and Bhutan, First Chairman Competition Commission of India. He is currently Chairman of Competition Advisory Services LLP. With inputs from Aditya Trivedi, Associate COMPAD)
