FTC Chair Says Artificial Intelligence Could “Turbocharge” Fraud

July 27, 2023

Federal Trade Commission Chair Lina Khan told CBS News Thursday that she believes artificial intelligence is an emerging threat to American consumers. 

“We are seeing risks that AI could be used to turbocharge fraud and scams,” she said in an interview.

Khan, who is leading the Biden Administration’s initiative regarding artificial intelligence, said the FTC is “looking to be vigilant to ensure that we don’t see anti-competitive practices or unfair methods of competition where some of the larger firms that have an advantage in this market are not using that power to squash competition.”

Last week, the White House announced that big tech firms leading the development of artificial intelligence, including Meta which owns Facebook and Instagram, Amazon, Google and Microsoft as well as ChatGPT-maker OpenAI and startups Anthropic and Inflection, have agreed to meet a set of safeguards brokered by the Administration. 

In a statement Friday the White House said it had secured “voluntary commitments” from the companies as the Administration has “moved with urgency to seize the tremendous promise and manage the risks posed by Artificial Intelligence (AI) and to protect Americans’ rights and safety.”

In the agreement with the White House, the companies pledged to regulate themselves to avoid AI spiraling out of control, including promises to do third-party testing, and prioritizing medical uses for the burgeoning technology. 

Even so, Khan noted, “When you have open markets, you want them to be contestable, which means that the existing giants have to be susceptible to competition.”

She added that there are “a whole set of antitrust lawsuits underway right now…that allege…some of these companies have engaged in anti-competitive tactics that have unfairly blocked competition.” 

Though she apparently did not specify which companies, last month the FTC filed a lawsuit against Amazon, accusing the online shopping giant of a years-long effort to enroll consumers in its Prime program without their consent and making it difficult for them to cancel the subscription, which currently costs $14.99 a month or $139 a year.

The U.S. is among a number of countries that have been looking at ways to regulate artificial intelligence, including European Union lawmakers who have been negotiating sweeping AI rules for the 27-nation organization.

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