CMA launches initial review of AI foundation models

In a bid to showcase its proactivity regarding the rising adoption of AI, the UK Competition and Markets Authority has recently announced that it would start examining the impact of AI foundation models (including large language models and generative AI) on consumers, businesses, and the economy.

The recent popularity of generative AI applications and chatbots such as ChatGPT has highlighted a technology that could transform various sectors globally, and thus amassed scrutiny from regulators – including the CMA in the UK. In launching this initial review, the CMA’s goal is “to help this emergent and rapidly scaling technology develop in ways that result in open, competitive markets that will continue to bring benefits for people, businesses and the economy in the UK”.

The review announced by the CMA follows the publication of the UK Government’s long awaited ‘Pro-innovation approach to AI regulation’ White Paper, released in March 2023. As discussed in a previous blog post on The Lens, the Government’s White Paper proposed a regulatory framework for AI based on a “common-sense, outcomes-oriented” approach. In line with the CMA’s role and objectives, the focus of the CMA’s review will now be on the likely implications of the development of AI foundation models for the structure and functioning of competition and for consumer protection in the UK.

The general review, which is conducted by the CMA under Section 5 of the Enterprise Act 2002, is expected to:

• examine how the competitive markets for foundation models and their use could evolve over time;
• explore what opportunities and risks these scenarios could bring for competition and consumer protection; and
• inform the production of guiding principles to support competition and protect consumers as AI foundation models develop.

The CMA welcomes views and submissions from interested parties by 2 June 2023. A report setting out the CMA’s findings is expected to be published in September 2023. The CMA’s review, its scope and possible implications will be analysed in more detail in the next edition of our Competition & Regulatory newsletter.

We continue to track closely developments in the area of AI (including Generative AI) and its implementation by and for our clients. For more information on AI, see our Regulating AI hub and Series.