The FTC And G7 Competition Authorities Take Aim At AI Market Power And Deception

G7 Communiqué: Focus on Digital Competition and AI

On October 4, 2024, the U.S. Federal Trade Commission (FTC) and other competition authorities from the G7 countries issued a communiqué addressing regulatory challenges posed by AI and digital markets. Coming just one week after the FTC's announcement of "Operation AI Comply," this communiqué underscores why companies using AI products need to prepare now for heightened regulatory scrutiny.

Key Concerns Raised by the G7

• Market Power Concentration: The communiqué described how high research and development costs, reliance on proprietary datasets, and substantial economies of scale are contributing to the consolidation of market power in the hands of a few dominant firms. The concentration of power enables established players to exploit bottlenecks or engage in exclusionary practices.