UK antitrust enforcer warns of big tech companies' dominance of GenAI

Image credits: Justin Sullivan/Getty Images

Britain's competition watchdog has warned of Big Tech's growing grip on the advanced AI market, with CEO Sarah Cardel expressing “real concern” about the state of development in the sector. .

In its latest document on fundamental AI models published on Thursday, the Competition and Markets Authority (CMA) has highlighted the interconnections and convergence between developers in cutting-edge technology fields that are responsible for the boom in generative AI tools. warned about the increasing number of

The CMA paper notes the recurring presence of Google, Amazon, Microsoft, Meta, and Apple (also known as GAMMA) across the AI ​​value chain: compute, data, model development, partnerships, and release and distribution platforms. There is. The regulator also highlighted that it recognized that partnership agreements “could play a pro-competitive role in the technology ecosystem,” but at the same time that “strong alliances and integrated companies” could work against opening up. It warned that it could pose a risk to competition. market.

Image credits: CMA Basic Model Update Paper

“We believe that FM [foundational model] “This sector is developing in a way that risks negative consequences for the market,” the CMA wrote, adding that it could be developed using large amounts of data and computational power and used as the basis for a variety of applications. mentioned a type of AI.

“In particular, the growing presence across the FM value chain of a small number of incumbent technology companies, which already hold positions of market power in many of today's most important digital markets, is likely to create “Open and effective competition can ultimately harm businesses and consumers, for example by reducing choice and quality and raising prices.”

The CMA conducted its first review of the top end of the AI ​​market in May last year, and subsequently published a set of principles for “responsible” generative AI development, which it says will serve as guidance to oversee the rapidly changing market. He said it would be. Will Hayter, senior director of digital markets at the CMA, told TechCrunch last fall that there was no rush to regulate advanced AI because he wanted to give the market a chance to develop.

The watchdog has since stepped in to scrutinize the friendly relationship between OpenAI, the developer of the viral AI chatbot ChatGPT, and Microsoft, a major investor in OpenAI. Its latest document describes the rapid changes in the market. For example, a report last year by Ofcom, the UK's internet regulator, found that 31% of UK adults and 79% of 13-17 year olds use generative AI tools such as his ChatGPT. The investigation was flagged. , Snapchat My AI or Bing Chat (aka Copilot). So, as the commercial “whirlwind” sucks up compute, data and talent, there are signs that the CMA is revising its initial lax position in the GenAI market.

Its update paper states that it identifies “three key interrelated risks to fair, effective and open competition,” and GAMMA's ubiquity speaks for itself: 1) The underlying model ( A corporate model that controls “critical inputs” for developing AI (also known as general purpose AI), which can limit access and build a moat against competition. 2) the ability of large tech companies to exploit their dominant positions in consumer or enterprise markets to distort the selection of GenAI services and limit competition in the deployment of these tools; 3) Partnerships involving major companies that the CMA says “could exacerbate existing positions of market power throughout the value chain.”

Image credits: CMA

In a speech Thursday at a legal event focused on generative AI in Washington, D.C., Cardel pointed to the early days of web development, when big tech companies built and entrenched their Web 2.0 empires on the side of regulators. He pointed out the “winner-take-all dynamics” seen in sat on their heels. She said it was important that competition enforcers did not repeat the same mistakes regarding this next generation of digital developments.

“The benefits we are hoping for are [advanced AI]For businesses and consumers, a world in which businesses themselves are subject to fair, open, and effective competition is far more likely in terms of quality, choice, price, and top-notch innovation than in a world in which businesses can simply compete. will be higher. “We aim to leverage our foundational model to further strengthen and expand our existing power positions in digital markets,” she said, “thus ensuring that a small number of companies with unprecedented market power do not disappear. “We believe it is important to act now,” he added. We stand to control not only how the most powerful models are designed and built, but also how they are incorporated and used in every part of our economy and life. ”

How does the CMA intend to intervene at the top end of the AI ​​market? Although there are no concrete measures to announce yet, Cardel will closely track the GAMMA partnership and assess whether these arrangements fall under existing merger rules. He said that he is strengthening the use of merger examinations to confirm whether the

That would free up formal investigative powers and even the power to block connections deemed anticompetitive. But so far, CMA has not gone that far, despite obvious concerns about the cozy GAMMA GenAI relationship. Investigations into the relationship between OpenAI and Microsoft continue to determine, for example, whether the partnership constitutes a “relevant merger situation.”

“Some of these arrangements are very complex and opaque, which means we may not have enough information to assess this risk without leveraging merger control powers to better understand them. “There is,” Cardel told the audience, also explaining the challenges in trying to understand power relationships. The AI ​​market can be expanded without releasing formal merger review authority. “Some arrangements that fall outside the Merger Rules may be problematic, even if they cannot ultimately be remedied through the Merger Regulations. These may have been structured by parties seeking to circumvent the scope of the Merger Rules. Similarly, some arrangements may not raise competition concerns.”

“We want to strengthen our merger review to provide greater clarity on what types of partnerships and arrangements fall under the merger rules and under what circumstances competition concerns may arise. “And that clarity will benefit the companies themselves,” she added. .

The CMA's latest report sets out several “indicative factors” that Cardel said could cause significant concern and attention to FM partnerships, including the partner's upstream power over AI inputs. Stated. and downstream power via distribution channels. He also said the watchdog would closely monitor the nature of the partnership and the level of “alignment of influence and incentives” between the partners.

Meanwhile, the UK regulator is urging AI giants to follow the seven development principles it set out last autumn to guide market development on responsible rails that incorporate competition and consumer protection. Here's a short version of what regulators are asking for: Accountability, Access, Diversity, Choice, Flexibility, Fair Dealing, Transparency. )

“We will apply the principles we have developed and use all legal authority at our disposal, now and in the future, to ensure that this transformative and structurally important technology I will do my best to fulfill that promise.”