OpenAI, Creator of ChatGPT, Allegedly Under FTC Scrutiny for Possible Consumer Protection Violations

by Michael Nguyen
OpenAI investigation

Reports suggest that the United States Federal Trade Commission (FTC) has initiated an inquiry into OpenAI, the creator of ChatGPT. It’s investigating whether the AI company infringed upon consumer protection laws by mining public data and allegedly disseminating inaccurate information via its chatbot, according to articles from the New York Times and Washington Post.

In line with the investigation, the FTC reportedly issued a 20-page letter to OpenAI, seeking in-depth information about its AI technology, products, clientele, privacy measures, and data security protocols. An FTC representative declined to comment on the matter.

OpenAI’s founder, Sam Altman, expressed disappointment via Twitter that the investigation was initially revealed through a “leak”, noting such an approach doesn’t facilitate trust building. However, he added that the company intends to cooperate with the FTC.

“We’re deeply committed to ensuring our technology is both safe and pro-consumer. We’re confident in our compliance with the law,” Altman stated. He emphasized the company’s devotion to user privacy and the design of systems to understand the world, not to intrude upon private individuals.

This move by the FTC symbolizes the most prominent regulatory challenge yet to the budding but rapidly expanding AI industry, although this isn’t the only hurdle these companies face. OpenAI and Meta, Facebook’s parent company, were recently sued by comedian Sarah Silverman and two other authors for alleged copyright infringement. They claimed their works were illicitly used for “training” the companies’ AI systems.

This week, OpenAI and The Big Big News revealed a licensing deal for OpenAI to use AP’s news story archives.

Following his congressional testimony in May and a European tour, Altman has increasingly become a global AI figure. While he has advocated for AI regulation, his emphasis tends to lean towards assessing existential threats, such as the prospect of superintelligent AI systems turning against humankind.

Some critics argue that obsessing over a distant “sci-fi trope” of overwhelmingly powerful AI could divert attention from more immediate harms, demanding a thorough examination of data transparency, discriminatory conduct, and the potential for deception and misinformation.

“The fear of these systems and our limited understanding of them is causing collective panic,” said Suresh Venkatasubramanian, a computer scientist at Brown University and ex-assistant director for science and justice at the White House Office of Science and Technology Policy, to the AP in May. “This unfounded fear is distracting from the real concerns we’re presently grappling with.”

The news about FTC’s investigation into OpenAI surfaced just hours following a contentious House Judiciary Committee hearing. FTC Chair Lina Khan was challenged by Republican legislators accusing her of overzealous pursuit of tech companies for alleged misconduct.

Republicans accused her of excessively targeting Twitter after its purchase by Elon Musk, indiscriminately suing major tech corporations, and refusing to excuse herself from specific cases. Khan rebutted these accusations, stating that as these corporations have expanded, more regulation is required. She argued that the tech conglomerate trend could potentially harm the economy and consumers.

Frequently Asked Questions (FAQs) about OpenAI investigation

Who is investigating OpenAI, and why?

The U.S. Federal Trade Commission (FTC) is investigating OpenAI over possible violations of consumer protection laws. The allegations involve scraping public data and disseminating inaccurate information via its chatbot, ChatGPT.

What information has the FTC requested from OpenAI?

The FTC has sent OpenAI a detailed request for information, as part of its investigation. This request includes details about its AI technology, products, customers, privacy safeguards, and data security arrangements.

What is OpenAI’s response to the investigation?

OpenAI’s founder, Sam Altman, expressed disappointment that news of the investigation was leaked but affirmed that the company would cooperate with the FTC. He insisted that OpenAI is committed to user safety, privacy, and legal compliance.

What other challenges are AI companies like OpenAI facing?

Apart from regulatory scrutiny, AI companies like OpenAI are also facing legal issues. For example, OpenAI and Meta (Facebook’s parent company) have been sued for copyright infringement by comedian Sarah Silverman and two other authors.

What was the response from Republicans to FTC’s approach towards tech companies?

Republican lawmakers accused FTC Chair Lina Khan of being overly aggressive in pursuing tech companies for alleged misconduct. They claimed that she was unduly targeting Twitter and other large tech companies, and refusing to recuse herself from certain cases.

More about OpenAI investigation

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CuriousMind July 14, 2023 - 3:09 am

Wonder what the future of AI looks like if even the creators are calling for regulation… makes u think.

MaryAnne88 July 14, 2023 - 8:08 am

This is y I’m skeptical about AI… No privacy anymore. Seems like the robots are taking over 🙁

TechieSteve July 14, 2023 - 3:07 pm

Altman is a smart guy, I’m sure OpenAI will come out on top. AI’s still the future, just need to iron out the kinks…

Sarah B July 14, 2023 - 3:31 pm

Wow, didn’t see this coming. OpenAI’s got a lot to deal with, huh. And I thought AI was the future, smh…

DavidOrtega July 14, 2023 - 3:43 pm

Good, someone’s finally checking these AI companies! Hope FTC digs deep… Can’t trust them blindly, can we?

MikeJohnson43 July 14, 2023 - 4:07 pm

No surpise here, big tech always gets hit with these things. What’s new? 😉

EcoWarrior22 July 14, 2023 - 8:40 pm

these tech giants really think they can play with our data and get away with it, huh. time to wake up people!

SciFiLover July 14, 2023 - 11:14 pm

Superintelligent AI turning against us? That’s a movie plot right there, lol!


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