The FTC’s interest in this matter is evident from a comprehensive 20-page “civil investigative demand” request letter, which was made public by The Washington Post. The letter explicitly states that the investigation is primarily concerned with determining whether OpenAI has engaged in practices that are deemed unfair or deceptive, thus posing considerable risks to consumers, including reputational harm.
Sources close to the situation have confirmed that The Wall Street Journal has obtained a copy of this document.
As expected, the FTC has remained tight-lipped about its ongoing investigation. Typically, the commission refrains from commenting on specific matters being investigated, as its activities remain nonpublic.
The extensive request letter is compiled with a series of thought-provoking questions aimed at gaining insight into OpenAI’s methodology for training its large language model. Additionally, the FTC seeks clarification on OpenAI’s marketing strategies and how the company handles personal information.
Investigation into OpenAI’s Privacy Incident
The Federal Trade Commission (FTC) is conducting an investigation into OpenAI, focusing on a privacy breach that occurred in March. The incident involved a bug that allowed certain users to view titles from another user’s chat history and payment-related information. Although the incident transpired in 2023, the FTC’s information request refers to a date in 2020.
OpenAI has not yet provided a comment regarding the investigation.
The Call for AI Regulation
FTC Chair Lina Khan has expressed her belief in the necessity of regulating AI software. In a New York Times op-ed on May 3, Khan emphasized the FTC’s commitment to promoting fair competition and protecting individuals from deceptive practices. She discussed the potential risks associated with AI tools, noting their reliance on vast amounts of unchecked data. These tools pose risks such as exposing personal details and violating user privacy.
