UK Competition Regulator Launches Review of AI Market

UK Competition Regulator Launches Review of AI Market

The UK’s Competition and Markets Authority (CMA) has launched an initial review into the market for artificial intelligence systems, looking at the underlying foundational large language models that power chatbots such as ChatGPT alongside the opportunities and risks that AI could present.

Foundation models, include large language models and generative Artificial Intelligence (AI), that have emerged over the past five years, have the potential to transform much of what people and businesses do.

To ensure that innovation in AI continues in a way that benefits consumers, businesses and the UK economy, the government directed the regulators, including the Competition and Markets Authority, to deliberate about how the innovative development and deployment of AI can be supported against five overarching principles: safety, security and robustness; appropriate transparency; fairness; accountability and governance; and contestability and redress.

In exercise of regulator’s function, under section 5 of the Enterprise Act 2002 (its general review function) of obtaining, compiling, and keeping under review information about matters relating to the carrying out of its functions, the CMA is reported in carrying out this review, ensuring that it has sufficient information to take informed decisions in relation to its work.

The regulatory body while announcing the review in its statement outlined three key areas it seeks examine:

1. How the competitive markets for foundational models and their use could evolve;

2. The opportunities and risks these scenarios could bring for competition and consumer protection;

3. What guiding principles should be introduced to support competition and protect consumers as AI models develop.

The CMA added that the review is aligned with the UK government’s AI white paper aimed to support open, competitive markets, the review seeks to understand how foundation models are developing and produce an assessment of the conditions and principles that will best guide the development of foundation models and their use in the future.

In March 2023, the UK Government published its white paper on AI, noting that a pro-innovation and proportionate approach to the regulation of how AI is used is key to realise the benefits it has to offer.

Sarah Cardell, Chief Executive of the CMA said, “It is crucial that the potential benefits of this transformative technology are readily accessible to UK businesses and consumers while people remain protected from issues like false or misleading information…. Our goal is to help this new, rapidly scaling technology develop in ways that ensure open, competitive markets and effective consumer protection.”

The development of AI touches upon several important issues, including safety, security, copyright, privacy, and human rights, as well as the ways markets work.

Many of these issues are being considered by government or other regulators, hence the initial review is said to focus on the questions the CMA is best placed to address and what are the likely implications of the development of AI foundation models for competition and consumer protection.

The CMA will work closely with the Office for AI, and fellow members of the Digital Regulation Cooperation Forum (DRCF) on the review and share findings with government to help inform the UK’s AI strategy.

As of now, the CMA is seeking views and evidence from stakeholders and is accepting submissions by 2 June 2023. After gathering of evidence and analysis, the CMA is said to publish a report which will set out its findings in September 2023.