A significant consumer-focused backlash has been ignited against ChatGPT, the revolutionary chatbot developed by OpenAI. The startup, known for its groundbreaking yet often inaccurate software, is now under investigation by the Federal Trade Commission (FTC). The FTC’s 20-page letter to OpenAI delves into concerns regarding potential harm caused to consumers through data collection and the dissemination of false information. The Washington Post first reported on this latest probe, which adds to the string of previous but unsuccessful attempts to address concerns related to Big Tech.
It is worth noting that OpenAI benefits from substantial investment from Microsoft Corp. (MSFT), further magnifying the impact of these developments.
Tim Giordano, a partner at Clarkson Law Firm, stated, “We believe that the backlash against OpenAI and similar companies has been steadily growing.” Clarkson Law Firm has filed class-action lawsuits against both OpenAI and Alphabet Inc., the parent company of Google (GOOG, GOOGL). The lawsuits assert various allegations, including theft of personal information and copyright infringement. Attorneys representing the plaintiffs argue that personal data, especially conversational data among individuals, plays a crucial role in training AI models. These claims have gained further traction following Google’s recent update to its privacy policies, revealing that services from Bard to Cloud AI rely on public data sourced from the web.
Giordano acknowledges the dilemma faced by individuals, stating, “You are left with two choices: either relinquish all your personal and copyrighted information to test volatile AI products using the internet or abstain from using the internet altogether.” In a world where our professional and social lives heavily depend on internet usage, the latter option becomes increasingly untenable.
The current scrutiny surrounding ChatGPT and OpenAI represents a critical moment in the ongoing discourse around AI technology and its intersection with consumer rights and privacy concerns. As the investigation unfolds, it remains to be seen how regulatory bodies will address these complex issues.
Class-Action Lawsuits Filed Against Open AI and Meta Platforms Inc.
Two additional class-action lawsuits have been filed this month by the Joseph Saveri Law Firm in San Francisco, with comedian Sarah Silverman as one of the three lead plaintiffs. One suit is against Open AI, and the other is against Meta Platforms Inc.
Allegations of Copyright Infringement
Both lawsuits allege that the companies’ artificial intelligence models are being trained through the use of copyrighted materials from books written by the plaintiffs.
FTC’s Need for a Strong Case
The Federal Trade Commission (FTC) under Lena Khan is in need of a solid case, following two years of setbacks in high-profile actions against tech giants. However, this week, a U.S. district court judge denied the FTC’s attempt to block Microsoft’s proposed acquisition of Activision Blizzard Inc. on anticompetitive grounds, which the FTC plans to appeal.
Litigation as a Means to Address Artificial Intelligence Issues
Given the scarcity of U.S. regulators’ involvement in addressing artificial intelligence concerns, particularly after a Senate subcommittee’s lack of progress following a single hearing, litigation is becoming an avenue for tackling these issues, specifically those concerning consumer data privacy.
According to Giordano, “Congress is not set up to act as quickly as they need to, and, at the rate technology is going, the FTC and class actions will fill the critical gap.”
Implications for Further Regulatory Probes
Investors are likely pondering whether the class actions filed against Alphabet and Meta will prompt additional regulatory probes by the FTC. The FTC will undoubtedly strive for a significant victory in a substantial case.