Artificial intelligence poses many new challenges for lawmakers and regulators as they race to get up to speed with the technology continually emerging in new places. One of the questions they are still working through is what competition policy issues may arise due to AI’s explosion. Antitrust advocates are particularly wary, given their belief that lax enforcement when social media platforms first emerged has allowed today’s tech giants to create such dominant positions in the marketplace.
In Congress, sweeping proposals similar to the antitrust effort in 2021 and 2022 have yet to emerge. However, a recently released bill suggests that there could be a renewed focus on antitrust in the months ahead, particularly as it intersects with AI. Earlier this month, Senator Amy Klobuchar (D-Minn.) led a bill to crack down on companies’ use of algorithms to collude to set higher prices. Five other Democrats cosponsored the bill, but it has yet to attract Republican support. Klobuchar’s role in leading this legislation is notable as she is the chair of the Senate Judiciary Committee Subcommittee on Competition Policy, Antitrust, and Consumer Rights. Klobuchar was a key figure in the antitrust drive a few years ago and would likely be an important voice in any effort to revive that focus.
While the press release accompanying the bill’s announcement does not mention Amazon’sAMZN
Project Nessie, lawmakers were likely considering this on some level when drafting the legislation. According to the Federal Trade Commission’s lawsuit, Project Nessie was allegedly an algorithm that Amazon would use to increase the price of goods and see if other retailers would follow suit. Although this is indirect coordination at best, it would likely raise concerns for antitrust advocates given Amazon’s market power and would be covered by Klobuchar’s new bill.
Despite Klobuchar’s sponsorship, this legislation likely faces a tough road to becoming law. The first step will be gaining Republican support in the Senate, and then the bigger challenge will be getting it through the House. Most House Republicans have shown less interest in competition policy than other issues around Big Tech, such as content moderation. Rep. Ken Buck (R-Colo.) has been one of the few House Republicans to work with Democrats on this effort, but he is an outlier in the rest of his party and is retiring at the end of this term.
The challenges facing Klobuchar’s bills represent the hurdles most proposals intended to curb Big Tech’s power in Congress face under the current divided government. With Congress’s absence, federal antitrust regulators at the FTC and Department of Justice are working to fill the gap, including competition in the AI industry.
The most prominent example is the FTC’s potential investigation into OpenAI’s relationship with MicrosoftMSFT
. While this partnership, and others like Amazon’s and Google’sGOOG
relationships with AI start-up Anthropic, have yet to be subjected to formal investigations, the FTC launched an inquiry in January. FTC Chair Lina Khan hopes the “study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.” The results of this inquiry will likely heavily influence any decision by the FTC or DOJ to pursue a more formal investigation of any of these partnerships.
However, the current leadership will unlikely stay in office if President Joe Biden loses the presidential election. A Republican president would likely replace Khan and Assistant Attorney General for Antitrust Jonathan Kanter with a new pair of nominees, which may not consider competition concerns for AI as high of a priority. Even if the new agency heads continue to press forward, the transition would slow the investigation and could delay any agency action until 2026. On the other hand, Biden’s reelection could make agency action in 2025 a more realistic possibility.
Even regulators, whose primary focus is not antitrust policy, have raised concerns about AI’s competition risks. At the Securities and Exchange Commission, Chair Gary Gensler expressed fears in a recent speech that investors could become overly reliant on a handful of base models. From Gensler’s perspective, this could lead to financial stability risks and is one reason he is considering regulating AI’s use in the financial sector. The agency’s proposed predictive analytics rule is the most prominent effort on AI regulation at the SEC at the moment. Still, given Gensler’s public remarks, future rulemaking is possible — particularly if he stays at the SEC during a second term for Biden. He told Politico he plans to do so.
