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NextImg:FTC threatens innovation and free speech with OpenAI investigation

The Federal Trade Commission has fired the first salvo of what some expect to be numerous investigations into artificial intelligence providers . OpenAI, the company that has gained fame for its AI-powered chatbot, was, perhaps not surprisingly, the first target.

The FTC is demanding information from OpenAI, including details of all large language model products offered, its corporate governance, and research and development agreements. They want this to determine whether OpenAI has engaged in “unfair or deceptive privacy or data security practices,” potentially causing reputational or other harm to consumers. The FTC is also determining whether to impose a penalty.

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But OpenAI has never claimed its product had no limitations or issues. Far from being deceptive, OpenAI CEO Sam Altman has traveled the world sharing his concerns about the technology in general. Consumers have flocked to try this new technology — precisely because it is new. While some have relied upon it to a greater extent than its accuracy currently warrants, this does not make it unfit for allowing people to try the technology. This is not AI driving a car or controlling a machine. It writes text. Those that intend to rely upon this text without checking, and despite the litany of warnings from OpenAI itself and the media, inherently do so at their own risk.

Given this, the FTC seems to be the only one engaging in “unfair” practices.

First, it is troubling that the commission is apparently beginning a process to regulate speech. All that OpenAI’s technology produces, at least for now, is generated text. It may use an automated process, but it is fundamentally speech. This speech is on all forms of topics, and the vast majority of it is no more commercial speech than an article printed in an online newspaper. Given that the courts have been clear about protecting a wide variety of speech, including corporate donations, it is hard to see how OpenAI’s writings would not be.

It is not at all clear how the FTC plans to distinguish between content generated by AI, which even some newsrooms are beginning to use, and human speech — if it can do so at all. If, for example, the FTC plans to police this space, should future complaints about unfair coverage in online newspapers be sent to the commission instead of lamented in a letter to the editor? Regulating AI for content generation by media outlets is regulating the media.

Second, the FTC appears to be using a marginally related regulatory power to justify its investigation into OpenAI. While it will fall to the courts to see how far the concepts of unfair and deceptive practices can be stretched, the FTC’s questions seem to go far beyond whether OpenAI engages improperly with its customers. While some of the questions the agency is asking, such as whether a security breach made users’ information available, are important to answer, it is unclear why OpenAI is being singled out over what appears to be a relatively common security incident.

The FTC appears to be bypassing the rulemaking process by stretching its existing authorities into broad regulation. It is effectively trying to write the playbook after the game’s end by claiming that prior conduct is unfair or deceptive.

But the most significant concern is the potential impairment of innovation caused by the FTC’s after-the-fact regulation. Companies may decide not to release products, or not release them as quickly, if they fear that the FTC may come calling. Forcing technology to abide by the glacial speed of regulation would be a recipe for falling far behind our nation’s strategic competitors .

It is important to remember that OpenAI makes a product that generates text. What users decide to do with it is, quite rightly, up to them. While some uses of AI, such as for decision-making, may be rightly covered by existing laws related to their use, OpenAI’s speech would seem to be covered by the First Amendment.

Commissioner Lina Khan said that “there is no AI exemption to the laws on the books.” Far more importantly, there is no FTC exemption to the First Amendment.

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Jeremy Straub is an associate professor in the North Dakota State University Computer Science Department, a Challey Institute faculty fellow, and the director of the NDSU Institute for Cyber Security Education and Research. The author's opinions are his own.