Last week’s agreement, first reported by The New York Times, between the Federal Trade Commission and the Department of Justice will pave the way for the Biden administration to further ramp up antitrust scrutiny of the AI industry. The FTC had previously launched an inquiry into the AI investments and partnerships between the largest tech companies and leading AI firms. Now, the agencies have taken the next step needed to start investigations into specific transactions and companies.
Under the split, the FTC will oversee OpenAI and Microsoft, while the DOJ will have jurisdiction over Nvidia. The FTC’s inquiry will likely look at Microsoft’s investment in OpenAI, which was, according to The New York Times, structured to avoid antitrust scrutiny. Any investigation into Microsoft may also examine its deal with Inflection AI, which resembled an acquisition but was not structured in a traditional manner.
It is uncertain how much scrutiny Amazon’s, Apple’s, and Google’s AI partnerships and investments will receive and which agency will be responsible for that oversight if deemed necessary. The deals are more similar to what the FTC will cover, but the DOJ has led the antitrust cases filed against Apple and Google in the last few years, which could mean another agreement is needed in the future, depending on how the current deal is structured.
Official investigations have yet to begin at the FTC or DOJ; last week’s agreement simply cleared the path for them to start. Once launched, these inquiries will likely last several months, if not years, and stretch well past the U.S. presidential election in November. Given this timeline, whoever is in the White House for the next presidency will influence how much these cases are prioritized.
If President Joe Biden is reelected, there is a good chance that FTC Chair Lina Khan and Assistant Attorney General for Antitrust Jonathan Kanter will remain in their current positions, especially if Republicans take control of the Senate. Regardless of whether they stay or are replaced, presumably by like-minded individuals, pursuing these investigations into the AI industry will be at the top of Biden’s antitrust regulators’ priority list. In Khan’s view, the goal is “to make sure [they’re] asking questions in a timely way.”
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There is a sense between Khan and Kanter that previous regulators have been too lax when now-dominant tech firms were just beginning and now are facing antitrust cases only after they have established strong positions that are more difficult to challenge. The hope for the AI industry is to preserve “the opportunity for competition and the potential for disruption…, rather than this moment being co-opted by some of the existing dominant firms,” Khan added. Kanter made similar comments in a recent interview with the Financial Times.
However, if Donald Trump returns for a second term, there is more uncertainty about how high his administration may prioritize antitrust investigations into the AI industry. Trump’s populist instincts could mean his administration takes a more aggressive stance than a traditional Republican president. The first Trump administration launched the investigations that turned into antitrust cases against Amazon, Apple, Google, and Meta, suggesting Big Tech is likely in Trump’s crosshairs if he returns to the White House.
Even though Big Tech will likely face a fair amount of scrutiny, the pressure under Trump may be different than the last four years, with more focus on the platforms’ alleged censorship of conservatives and de-platforming of individuals. In her first public appearance since joining the FTC, Republican FTC Commissioner Melissa Holyoak last month called for the agency to open a study on these practices by tech and financial platforms that would build upon actions outlined in a May 2020 executive order from Trump. Holyoak’s remarks underscore the increased attention the censorship issue will receive if Trump wins.
Still, under Trump, there will likely be some degree of antitrust scrutiny of the AI industry, making it one of the few sure outcomes of this year’s U.S. presidential election. The primary difference between Biden and Trump will be the degree to which it is prioritized, not whether it is pursued at all, with the topic facing more competition as the top item under Trump. Of course, how much time and energy is devoted to the issue will impact how quickly any investigations are turned into lawsuits, with the potential of a more lax Trump administration either not completing investigations or, ultimately, choosing not to file any challenges.
