Executive Order on AI: Antitrust Issues | BakerHostetler

On Oct. 30, the White House issued Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (Executive Order). In the wide-ranging Executive Order, the White House provides a road map for its policy positions and administrative priorities with respect to the rapidly developing and expanding advent of artificial intelligence (AI). The Executive Order covers a number of broad topics related to the development of AI, including setting standards for safety and security; protecting Americans’ privacy; advancing equity and civil rights; giving preference to certain groups, such as consumers, patients, students and workers; advancing American leadership on AI worldwide; and ensuring the government uses AI responsibly. In addition to these policy priorities, the Executive Order devotes an entire section to “promoting innovation and competition” in AI, noting that “irresponsible use” of AI could, among other harms, “stifle competition.”

The Executive Order’s innovation and competition policy priority is consistent with other policy announcements of the Biden administration – to highlight competition and stress its importance wherever possible. Within this policy priority, the Executive Order seeks to encourage innovation by expanding AI research grants and to streamline visa procedures to ensure that AI research and development continues to flourish in the United States. From a competition perspective, the Executive Order seeks to “promote a fair, open, and competitive AI ecosystem” by preferencing small businesses to innovate for AI breakthroughs and directing the Federal Trade Commission (FTC) to exercise its antitrust authority over the AI space.

More specifically, the Executive Order directs each agency developing AI policy to consider competition both in markets for AI and in related markets. Such consideration should be taken with an eye to concentration of market share for inputs, aiming to prevent “dominant firms” from disadvantaging startups and thereby lessening competition. The FTC has been directed to come to an opinion as to whether it is empowered under the FTC Act to regulate competition in AI. A subsection of the Executive Order is also devoted to the semiconductor industry, because semiconductors “power AI technologies.” To that end, the Executive Order directs the U.S. Department of Commerce to take a number of steps in its implementation of the CHIPS Act –including to make “competition-increasing” decisions when funding semiconductor research and development.

Although nothing in the Executive Order will have an immediate impact on antitrust enforcement, it is noteworthy that the Biden administration continues to stress competition and antitrust enforcement in nearly all of its policy publications. Consistent with other Biden administration policies, the Executive Order makes clear that it views large players as threats to competitive markets. Perhaps the most interesting aspect of the Executive Order is its directive to the FTC: If the FTC determines it has antitrust jurisdiction over AI under the FTC Act, would such a determination be challenged in the courts?

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