Global: FTC Chair Lina Khan shares how the agency is looking at AI

FTC Chair Lina Khan revealed that the U.S. Federal Trade Commission (FTC) will thoroughly investigate the rise of AI technology across various sectors. Speaking at TechCrunch’s StrictlyVC event in Washington, D.C., on Tuesday, Khan emphasized that the agency’s goal is not to stifle startups with increased regulation but to ensure a fair and competitive marketplace.

“We want to ensure the pathways of commerce remain open. If you have a good idea and can commercialize it, you should have a fair shot at competing,” Khan stated. “Your success should depend on your innovation and business acumen, not on whether you pose a threat to larger, established companies.”

Despite this supportive stance towards startups, the FTC is vigilant about the potential risks associated with AI. The agency has already noticed a rise in consumer complaints, such as cases involving voice-cloning fraud. A notable incident involved OpenAI’s ChatGPT, which released and then retracted a voice that sounded like actress Scarlett Johansson, who claimed her voice was cloned without her consent.

Khan explained that the FTC is monitoring all aspects of AI, from the hardware and cloud infrastructure to AI models and applications. The agency seeks input from various stakeholders to understand both the opportunities and risks associated with AI technology.

The FTC has faced challenges in regulating AI, even with an influx of technologists applying to join the agency. Khan mentioned that over 600 technologists applied to work with the FTC, though she did not disclose how many were hired. The FTC currently employs around 1,300 people, 400 fewer than in the 1980s, despite the economy growing fifteenfold since then.

With numerous antitrust and consumer protection cases, the FTC is adopting innovative strategies to combat fraud, particularly in the AI sector. For instance, the agency recently launched a voice-cloning challenge, inviting the public to propose methods for detecting and monitoring fraudulent voice cloning in real-time.

Another area of focus for the FTC is ensuring true openness in AI. Khan questioned, “How do we ensure openness isn’t just a branding exercise, but genuinely reflected in the terms of use?” She emphasized the need to prevent “open first, closed later” practices that were prevalent during the Web 2.0 era.

The FTC is also cautious about AI hype, where the value of AI products may be overstated. “Some AI tools are being marketed with exaggerated claims about their value,” Khan noted. “We want to ensure accurate marketing and have already addressed several deceptive advertising cases related to AI.”

Through these efforts, the FTC aims to foster a competitive, transparent, and fair AI landscape that benefits both startups and consumers.