UK Competition Watchdog Launches Review of AI Market

CMA Chief Sarah Cardell said the regulator would examine technology such as ChatGPTThe UK competition watchdog is launching a review of the artificial intelligence market, including the models behind popular chatbots such as ChatGPT, as the industry comes increasingly into global regulators’ crosshairs.

Sarah Cardell is the chief executive of UK Competition and Markets Authority. She said that the watchdog will examine “foundation models” — such as software underpinning ChatGPT — and how the market around these models are developing.

She stated that the regulator will assess “the true opportunities” as well as “what guardrails and principles we should develop to ensure that competition works effectively [and] that consumers are protected”.

The review is coming at a time when regulators are scrutinizing the development of generative AI – technology that can produce images or texts that are almost indistinguishable from human output.

This sector is a rare shining light for innovation in technology in the UK. It’s partly because of the success that DeepMind has had, a start-up from the UK , acquired by Google in 2014. .

The US Federal Trade Commission issued a warning to the industry earlier this week. It said it was “focused intensely on the ways in which companies can choose to use AI technologies, including new generative AI tool, to have an actual and substantial impact for consumers.”

On Thursday, the chief executives of AI firms, such as Google, Microsoft, and ChatGPT maker OpenAI will also meet US Vice-President Kamala Harri to discuss safety.

Cardell was appointed by the CMA in December. She said that the CMA “fact finding” mission on AI would involve “a wide range of interested stakeholders including businesses, academics, and others to gather rich and broad information”. She stated that the review was not aimed at “any specific companies”.

The development and running of large AI models, such as OpenAI’s GPT-4 or Google’s LaMDA (which powers the Bard bot), is extremely costly and difficult. They are therefore in the hands a few companies such as Google and Microsoft, as well as some well-funded start ups such as and

Cardell’s comments came in response to the regulator’s last-week decision to block Microsoft from acquiring Call of Duty developer Activision Blizzard for $75bn. Brad Smith, Microsoft’s President, was furious at the decision made by an independent panel. He accused Britain of being “closed to business” and hindering technology innovation.

Cardell stated: “I believe it’s completely the opposite. . . “I speak with a lot [of start-ups] who want open, competitive markets that allow them to compete fairly and efficiently.”

She said that although the regulator is not “anti-digital” it has “clearly and widely acknowledged that there have been some historical underenforcement in merger control, especially in tech”.

Cardell, the CMA’s former general counsel, stated that the organization did not take a “arbitrary, unpredictable, or excessively intervenist approach” in taking over companies.

Former Slaughter and May attorney has been appointed as the regulator is preparing to assume sweeping powers in order to monitor the conduct of technology companies.

The CMA will be empowered to fine companies that violate its new rules as much as 10% of their turnover under legislation introduced in the parliament this April.

Cardell explained that the work of the digital market unit in assessing markets, such as mobile ecosystems, would inform its decisions on which companies to target. In its final report last year on the latter, the regulator stated that there were strong arguments for targeting Apple and Google due to their dominance of the market.