Generative AI faces more regulatory and legal challenges

With creative workers across the board, including marketers, looking to a future of generative AI-powered content creation, some of the highest profile vendors of the disruptive technology are facing regulatory inspection and at least one lawsuit.

In April, OpenAI, creators of ChatGPT, made concessions to Italy’s data protection agency in an attempt to bring itself into compliance with GDPR. News broke today that it is facing similar inquiries from the Federal Trade Commission, the first signs of regulatory threats within the U.S.

FTC sends a 20-page letter. The agency has opened a probe into OpenAI and ChatGPT with a 20-page letter seeking the answers to many questions concerning the training of its large language models and use of personal data. The FTC aims to clarify whether OpenAI “engaged in unfair or deceptive privacy or data security practices or engaged in unfair or deceptive practices relating to risks of harm to consumers,” according to the letter.

Although these tools are novel, they are not exempt from existing rules, and the FTC will vigorously enforce the laws we are charged with administering, even in this new market.

FTC Chair Lina Khan in a recent op-ed.

Google faces lawsuit. As the market leader in the genAI space, OpenAI is bearing the brunt of regulatory scrutiny while its major competitors seem to fly under the radar. An exception is Google, which stands accused of illegally using copyrighted content and stealing the personal information of millions of Americans to train its AI products.

The allegations were made in a proposed class action lawsuit in San Francisco on Tuesday. The claimants allege Google has:

• Been illegally taking digital content created and shared by millions of Americans.
• Been using this private property to train its AI technology, including its chatbot, Bard.
• Stolen “virtually the entirety of our digital footprint,” including “creative and copywritten works” to develop its catalog of AI products.

The eight plaintiffs have accused Google of taking a variety of content they shared on social media without permission, ranging from photos on dating websites to playlists saved on Spotify to videos uploaded onto TikTok.

One of the claimants, who is described as a best-selling author from Texas, more specifically accused Google of copying a book they wrote in its entirety to train Bard.

Dig deeper: Our generative AI coverage is here.

Why we care. There are going to be many bumps in the road on the way to AI paradise — if such a thing can ever exist. Pause to think about it: Isn’t there something clearly wrong with using people’s intellectual property to train technology from which those people don’t stand to profit? Throwing personal data into the mix is just icing on the cake.

If these innovations, in many ways welcome, are not to be fatally hamstrung, regulators need to get a grip on them as soon as possible. Expect that to happen in Europe faster than the U.S., although, to be fair, the FTC has moved with speed.

Additional reporting by Nicola Agius