Guiding Principles

The Biden Administration’s “eight guiding principles and priorities” for AI policy establish a broad, multi-agency framework for addressing the benefits and risks associated with advanced AI development.  These principles and priorities are:1

1. Artificial Intelligence must be safe and secure;
2. Promoting responsible innovation, competition, and collaboration will allow the United States to lead in AI and unlock the technology’s potential to solve some of society’s most difficult challenges;
3. The responsible development and use of AI require a commitment to supporting American workers;
4. Artificial Intelligence policies must be consistent with [the] Administration’s dedication to advancing equity and civil rights;
5. The interests of Americans who increasingly use, interact with, or purchase AI and AI-enabled products in their daily lives must be protected;
6. Americans’ privacy and civil liberties must be protected as AI continues advancing;
7. It is important to manage the risks from the Federal Government’s own use of AI and increase its internal capacity to regulate, govern, and support responsible use of AI to deliver better results for Americans; and
8. The Federal Government should lead the way to global societal, economic, and technological progress, as the United States has in previous eras of disruptive innovation and change.

Competition Concerns

In addition to addressing risks to national security, trust and safety, and other broad societal issues, the Executive Order expresses concern about the potential for consolidation and reduced competition in AI-related markets and potential to harm competition in other markets. 

Specifically, the Order directs each federal agency developing policies and regulations related to AI to “address[] risks arising from concentrated control of key inputs” and to “tak[e] steps to stop unlawful collusion and prevent dominant firms from disadvantaging competitors.”2 The Order also encourages the FTC “to consider . . . whether to exercise the Commission’s existing authorities, including its rulemaking authority under the Federal Trade Commission Act, . . . to ensure fair competition in the AI marketplace and to ensure that consumers and workers are protected from harms that may be enabled by the use of AI.”3  The Order’s reference to workers is likewise notable, given the antitrust agencies’ current focus on labor issues as potential antitrust concerns. 

The President’s support for a wide-ranging set of potential actions in the AI arena, including potential rulemaking, is in line with the Justice Department’s and FTC’s expansive application of the antitrust laws to ameliorate perceived threats to competition.  Indeed, the Order’s broad focus on AI-related competition issues would be consistent with the FTC’s broad interpretation of its enforcement mandate and authority.  More generally, the Biden Administration’s earlier Executive Order on Promoting Competition in the American Economy has encouraged a whole-of-government approach to antitrust enforcement.

Although the Order does not provide much detail on these points, it is clear that preserving competition in the AI arena is a priority area for the Administration.  The antitrust agencies have for some time focused on issues like algorithmic pricing and information-exchange theories.4 And, with the recent advances in generative AI, the agencies’ areas of interest and concern are now broader and more sharply highlighted.

AI Inputs are likely to be the subject of antitrust scrutiny

The AI Executive Order states that the “Federal Government will promote a fair, open, and competitive ecosystem and marketplace for AI and related technologies so that small developers and entrepreneurs can continue to drive innovation.”5 In support of that aim, the Order calls for attention to the risk of putatively dominant firms’ use of “key assets” including semiconductors, computing power, cloud storage, and data.6 Firms should be aware that businesses involving those and similar products and services related to AI are likely be scrutinized as a consequence of the AI Executive Order and the significant attention regulators are giving to advanced AI.

Separate from the President’s Order, the FTC has identified various risks from the emergence of generative AI.  The FTC is especially concerned about dominance and potential collusion around what it calls “the essential building blocks of generative AI”:  data, talent, and computational resources.7 The FTC has also expressed concern about strategies that begin with open-source platforms that are later closed, and network and platform effects that could “supercharge harms from unfair conduct.”8

Looking Ahead

In light of the President’s AI Executive Order and the antitrust agencies’ expansive antitrust enforcement posture, we can expect that the agencies will be closely scrutinizing the development and use of advanced AI technology and related inputs (such as data, computational resources, cloud computing services, and chips).  Moreover, businesses in this space should be careful to avoid interactions that could be perceived as potentially unlawful collaborations and guard against the exchange of competitively sensitive information. 

Hogan Lovells attorneys will be closely monitoring the federal antitrust regulators’ activities in furtherance of this Executive Order and are well-positioned to provide guidance to help clients navigate this rapidly developing antitrust enforcement landscape.

References

1 United States, Executive Office of the President [Joe Biden].  Executive order 14110: Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.  30 October 2023.  Federal Register, 88 FR 75191 at § 2(a)-(h) (available here). 

2  Id. at § 5.3(a).

3 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, § 5.3(a).

4 See, e.g., Algorithms and Collusion – Note by the United States, available at https://www.justice.gov/atr/case-document/file/979231/download; Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division Delivers Remarks at GCR Live: Law Leaders Global 2023 (discussing focus on information-exchange theories), available at https://www.justice.gov/opa/speech/principal-deputy-assistant-attorney-general-doha-mekki-antitrust-division-delivers-0; FTC, Generative AI Raises Competition Concerns (June 29, 2023 blog post) (“[I]f generative AI itself becomes an increasingly critical tool, then those who control its essential inputs could wield outsized influence over a significant swath of economic activity.”), available at https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2023/06/generative-ai-raises-competition-concerns.

5 Id.at § 2(b).

6 Id.

7 FTC, Generative AI Raises Competition Concerns.

8 Id.