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UK antitrust enforcement agency sounds alarm over Big Tech’s control of GenAI

The UK’s competition watchdog has sounded the alarm over Big Tech’s firm grip on the market for advanced artificial intelligence, with chief executive Sarah Caddell expressing “genuine concerns” about the industry’s developments.

In an update on underlying artificial intelligence models published on Thursday, the Competition and Markets Authority (CMA) warned of increasing interconnectivity and concentration among developers in cutting-edge technology areas responsible for generating a boom in artificial intelligence tools.

The CMA paper notes that Google, Amazon, Microsoft, Meta and Apple (aka GAMMA) are recurring players in the AI ​​value chain: computing, data, model development, partnerships, publishing and distribution platforms. While the regulator also stressed that it recognized that partnership arrangements “can play a pro-competitive role in the technology ecosystem,” it warned that “strong partnerships and integrated companies” could create opportunities for competition. It comes with risks and runs counter to openness. market.

CMA GAMMA Chart

Image Source: CMA base model update file

“We are worried about F.M. [foundational model] The CMA writes that the way the industry is developing could lead to negative market outcomes. It refers to a type of artificial intelligence developed using large amounts of data and computing power to support a variety of applications.

“In particular, the growing influence in the FM value chain of a small number of incumbent technology companies, which already dominate many of today’s most important digital markets, could profoundly impact FM-related markets to the detriment of equity, “Open and effective competition can ultimately harm businesses and consumers, for example by reducing choice and quality and raising prices,” it warned.

The CMA conducted an initial review of the top end of the AI ​​market last May and subsequently published a set of principles for “responsible” generative AI development that it said would guide its regulation of the rapidly evolving market. Although Will Hayter, senior director of digital markets at the CMA, told TechCrunch last autumn that it was in no rush to regulate advanced AI because it wanted to give the market a chance to develop.

Since then, regulators have stepped in to scrutinize the close relationship between OpenAI, the developer behind the viral AI chatbot ChatGPT, and Microsoft, a major investor in OpenAI. Its latest document comments on the dizzying pace of change in the market. For example, Ofcom, the UK’s internet regulator, noted in a report last year that research found that 31% of adults and 79% of teenagers aged 13 to 17 in the UK had used generative AI tools such as ChatGPT, Snapchat My AI or Bing Chat (aka Copilot). There are therefore signs that the CMA is changing its initially relaxed stance on the GenAI market, amid a commercial whirlwind attracting computing, data and talent.

As it puts it, its updated document identifies three “critical interrelated risks to fair, effective and open competition,” illustrated by GAMMA’s ubiquity: 1) Control over the development of the underlying model (known as general artificial intelligence) is “critical 2) the ability of tech giants to use their dominant position in consumer or enterprise-facing markets to distort the selection of GenAI services and limit the deployment of these tools competition in; 3) partnerships involving key players which, the CMA says, “may exacerbate existing market power positions through the value chain”.

CMA GAMMA GenAI Development Relations

Image Source: China Manufacturers Association

Khadr, who spoke Thursday at a legal event focusing on generative artificial intelligence in Washington, D.C., pointed to the “winner-take-all dynamics” that emerged in the early days of web development, when big tech companies built and consolidated their Web 2.0 empires, And regulators are sitting on their heels. She said it was important that competition enforcers did not repeat the same mistakes in the next generation of digital developments.

“The benefits we want to see [advanced AI]For businesses and consumers, in terms of quality, choice and price and the best innovation, in a world where these businesses themselves are subject to fair, open and effective competition, rather than in a world where they are simply able to leverage the underlying model to further consolidate and extend their existing power positions in digital markets,” she said, adding: “We therefore believe it is important to act now to ensure that a small number of companies with unprecedented market power do not end up controlling more than just the most powerful The way our models are designed and built also controls how they are embedded and used in various parts of our economy and lives. “

How will CMA intervene in the high-end artificial intelligence market? No specific measures have been announced yet, but Cardell said it is closely tracking GAMMA’s partnerships and increasing its use of merger reviews to understand whether these arrangements comply with existing merger rules.

This would free up formal investigative powers and even prevent links it deems anti-competitive. But the CMA hasn’t gone that far yet, despite growing concerns about GAMMA GenAI’s cozy relationship. Its review of the links between OpenAI and Microsoft continues, for example, to determine whether the partnership constitutes a “relevant merger situation.”

“Some of these arrangements are quite complex and opaque, which means that without using our merger control powers to build that understanding, we may not have enough information to assess that risk,” Caddell also told the audience, explaining the attempt to understand the powers Dynamic challenges. Developments in the AI ​​market without releasing formal merger review powers. “Some arrangements that do not comply with the merger rules may be problematic even if they cannot ultimately be remedied by merger control. They may even be designed by parties seeking to avoid the scope of the merger rules. Likewise, some arrangements may not give rise to competition concerns .”

She added: “By strengthening merger scrutiny, we hope to provide greater clarity on what types of partnerships and arrangements may fall within the scope of the merger rules and in what circumstances competition issues may arise, and this clarity will also provide The business itself benefits.”

The CMA’s latest report lists a number of “indicative factors” that Caddell said could raise more concerns and concerns about FM partnerships, such as the partners’ upstream power, over AI input; and downstream power , through distribution channels. She also said regulators would look closely at the nature of partnerships and the “level of alignment of influence and incentives” between partners.

Meanwhile, UK regulators are urging AI giants to guide the market on a responsible track by following seven development principles set out last autumn, which include competition and consumer protection. (The short version it wants to see is: accountability, access, diversity, choice, flexibility, fair dealing and transparency.)

“We are committed to applying the principles we have set out and using all legal powers at our disposal – now and in the future – to secure this transformative and structurally critical technology,” Caddell said in a statement. deliver on its promises.”

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