FTC Investigates ChatGPT over Consumer Protection Concerns

The U.S. Federal Trade Commission (FTC) has begun a thorough check into OpenAI, the company from San Francisco that created the well-known AI chatbot, ChatGPT. News outlets The Washington Post reported on July 13, 2023, that this check is to see if OpenAI has gone against laws that keep customers safe, possibly putting their personal reputations and data at risk.

The FTC has issued a 20-page demand for records to OpenAI, seeking to know more about how the company handles possible problems related to their AI models. This government agency is particularly checking if OpenAI has been unfair or misleading, causing damage to people’s reputations.

The FTC’s inquiry extends to a security incident that OpenAI disclosed in March 2023. A bug in OpenAI’s systems had allowed some users to view payment-related information and some data from other users’ chat history. The FTC is probing whether OpenAI’s data security practices in this incident violated consumer protection laws.

The FTC is also seeking information on any research, testing, or surveys conducted by OpenAI that assess how well consumers understand the “accuracy or reliability of outputs” generated by its AI tools. Furthermore, the FTC has requested details about how OpenAI licenses its models to other companies.

This investigation comes in the wake of previous concerns raised about OpenAI’s practices. In March 2023, the Center for AI and Digital Policy (CAIDP) asked the FTC to investigate OpenAI for alleged violations of consumer protection rules, citing that the rollout of AI text generation tools has been “biased, deceptive, and a risk to public safety,” as reported by The Verge.

The CAIDP had pointed out potential threats from OpenAI’s GPT-4 generative text model, including the production of malicious code, highly tailored propaganda, and the potential for biased training data to result in unfair race and gender preferences in areas such as hiring.

The FTC’s investigation into OpenAI represents a significant step in the agency’s ongoing interest in regulating AI tools. It has previously warned that biased AI systems could draw enforcement action. An investigation of OpenAI, one of the major players in the generative AI field, marks a major escalation in the FTC’s efforts.