EU, UK and US competition authorities publish shared principles for competition in AI

On 23 July 2024, the Competition and Markets Authority, the European Commission, the US Department of Justice and the US Federal Trade Commission published a joint statement on competition in generative AI foundation models and AI products. The statement sets out their views on common principles to support competition, protect consumers and promote innovation in AI technologies. 

The statement identifies three main competition risks related to AI:

1. Concentrated control of key inputs: according to the statement, the importance of chips, compute, data and specialist technical expertise for the development of AI means that a small number of companies may be able to “exploit existing or emerging bottlenecks across the AI stack” to have a disproportionate influence over the future development of these tools. The statement notes that this could ultimately limit innovation.
2. Entrenching or extending market power in AI-related markets: the statement asserts that large digital firms may be able to extend or entrench their market power across ecosystems in AI-related markets, to the detriment of future competition. 
3. Arrangements involving key players could amplify risks: the statement notes that arrangements including partnerships, investments and other connections between firms related to generative AI could, in some cases, be used by firms to “undermine or coopt competitive threats”. 

The statement notes that other risks can arise when AI is deployed across markets, including the risk that:

• algorithms may be used to allow competitors to share competitively sensitive information, engage in price-fixing, or otherwise collude in violation of competition laws; 
• algorithms may enable firms to undermine competition through unfair price discrimination or exclusion; and
• some firms may deceptively or unfairly use consumer data to train their models, potentially undermining individuals’ privacy, security and autonomy. The statement emphasises the importance of consumers being informed, where relevant, of when and how an AI application is employed in the products and services they purchase or use.

To address these potential risks, the statement sets out fair dealing, interoperability and choice for businesses and users as key common principles to support competition, protect consumers and help businesses to innovate and thrive.  While the statement does not explain how these principles will be implemented in practice, it clearly shows the authorities’ intention to work closely together, as well as their commitment to be vigilant and proactive in the AI space.

For more information, see our competition newsletter.