FTC Opens an Investigation into OpenAI Creator ChatGPT for Possible Violations of Consumer Protection Law

Image: OpenAI

The future of AI development is taking a new turn as the FTC opens an investigation examining possible violations of the consumer protection law. OpenAI became an instant celebrity as news of its ChatGPT chatbot spread across the globe which became the backbone of Microsoft’s newly updated Bing search engine. Since then U.S. regulators have increasingly begun striving to understand and create policy regarding the new technology and this investigation is likely to play a role in future laws, policy, and its application.

From The Washington Post (via Neowin):

“The FTC called on OpenAI to provide detailed descriptions of all complaints it had received of its products making “false, misleading, disparaging or harmful” statements about people. The FTC is investigating whether the company engaged in unfair or deceptive practices that resulted in “reputational harm” to consumers, according to the document.”

The 20-page document is said (per CNN) to be a type of administrative subpoena requesting information regarding a data leak that occurred in March where some personal user data, including partial payment details and chat histories, was made available to other users of ChatGPT. The probe is also seeking further explanation of how ChatGPT’s algorithms produce its responses amid multiple complaints and lawsuits ranging from copyright infringement to false information.

From CNN:

“It calls for descriptions of how OpenAI tests, tweaks and manipulates its algorithms, particularly to produce different responses or to respond to risks, and in different languages. The request also asks the company to explain any steps it has taken to address cases of “hallucination,” an industry term describing outcomes where an AI generates false information.”

From NeoWin:

“OpenAI is already dealing with a number of lawsuits filed against it by people for various reasons. One lawsuit that was filed very recently by two well-known authors, Paul Tremblay and Mona Awad, claim that ChatGPT illegally access the content of their novels in order to create summaries of those works.”

As the FTC opens its investigation into ChatGPT the probe is expected to have a wide-ranging impact on the use and application of AI chatbots which quickly gained usage following its launch. OpenAI’s ChatGPT was not the only AI to have been found providing, or plagiarizing, information as Google’s Bard was caught doing the same. In one publicized instance, it admitted that it did use Tom’s review data without permission only to then later deny it.

The FTC has already said that companies claiming to use AI for their responses will be held accountable for false information, its misuse, and including the validity of whether or not that product does not actually have to true AI as its basis. Needless to say, the FTC’s investigation into ChatGPT could expand to further levels depending on what is discovered during this probe.

Per FTC:

“Does the product actually use AI at all? If you think you can get away with baseless claims that your product is AI-enabled, think again. In an investigation, FTC technologists and others can look under the hood and analyze other materials to see if what’s inside matches up with your claims. Before labeling your product as AI-powered, note also that merely using an AI tool in the development process is not the same as a product having AI in it.”

FTC regulations that AI developers and users are required to be compliant with:

  • Section 5 of the FTC Act. The FTC Act prohibits unfair or deceptive practices. That would include the sale or use of – for example – racially biased algorithms.
  • Fair Credit Reporting Act. The FCRA comes into play in certain circumstances where an algorithm is used to deny people employment, housing, credit, insurance, or other benefits.
  • Equal Credit Opportunity Act. The ECOA makes it illegal for a company to use a biased algorithm that results in credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance.

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Peter Brosdahl
As a child of the 70’s I was part of the many who became enthralled by the video arcade invasion of the 1980’s. Saving money from various odd jobs I purchased my first computer from a friend of my dad, a used Atari 400, around 1982. Eventually it would end up being a lifelong passion of upgrading and modifying equipment that, of course, led into a career in IT support.

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