The U.S. Federal Trade Commission (FTC) issued an announcement stating that it has issued investigation orders against five companies. The five companies are Alphabet (Google’s parent company), Amazon, Anthropic PBC, Microsoft and OpenAI. These brands are required to disclose recent information on AI investments and partnerships. The purpose of this probe is to allow the FTC to better understand these partnerships and how they may affect competition with AI companies throughout the technology industry. Federal Trade Commission Chairman Lina M. Khan said:
“This investigation focuses on whether investments and cooperation by dominant companies distort innovation and undermine fair competition.”
The probe will involve different aspects of these AI technology partnerships, including competition for AI investment and resources, as well as the actual impact of specific partnerships or investments. There will also be a check on the competition for transactions and its impact. The five companies named in the FTC order now have 45 days to provide relevant information to the agency. The Federal Trade Commission may use this to launch a more detailed investigation of these AI associations.
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FTC’s 6(b) Inquiry
The FTC has issued orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct studies that allow enforcers to gain a deeper understanding of specific issues. The findings from these orders can help inform future Commission actions. The compulsory orders were sent to Alphabet, Inc., Amazon.com, Inc., Anthropic PBC, Microsoft Corp., and OpenAI, Inc.
The FTC is seeking information specifically related to:
- Information regarding a specific investment or partnership, including agreements and the strategic rationale of an investment/partnership.
- The practical implications of a specific partnership or investment, including decisions around new product releases, market-entry, and other strategic moves.
Companies’ Responses
Microsoft, which holds an observer, non-voting seat on OpenAI’s board, has welcomed the FTC inquiry and expressed its willingness to cooperate with the agency. Google, which has invested in Anthropic, has also expressed its support for the inquiry. Amazon, which has committed billions of dollars to Anthropic, has not yet commented on the matter.
Conclusion
The FTC’s inquiry into the AI investments and partnerships of major tech companies is a significant step in understanding the competitive dynamics in the AI space. The findings from this inquiry could inform future regulatory actions and help ensure a fair and competitive landscape for AI innovation.
