The U.S. Federal Trade Commission (FTC) has planned to look into how platforms offering GenAI chatbots are running their businesses. This week, the FTC issued an official directive asking GenAI platforms to compile a special report outlining security features, engagement monetization, and data collection practices among other key operational factors.
Google’s Gemini, OpenAI’s ChatGPT, xAI’s Grok, and Anthropic’s Perplexity are among popular AI chatbots. Owing to their generative AI capabilities, these platforms are capable of having engaging conversations with their users on topics ranging from professional mail suggestions to philosophical and emotional conundrums.
“The information provided will assist the Commission in conducting
a study of how companies offering AI companions monetize user engagement, impose and enforce age-based restrictions, process user inputs, generate output and monitor and enforce compliance with rules, terms of service, or other policies governing us of the product or service,” the FTC said in its directive on September 11.
The use of generative AI has grown exponentially over the last two years with major Big Tech firms having jumped into the arena. After ChatGPT’s launch in November 2022 amassed a stellar response, the race to launch similar chatbot initiated and intensified within days.
From Mark Zuckerberg to Elon Musk, tech moguls have rushed into the GenAI arena with their own chatbots deployed across apps including X, WhatsApp, Instagram, and Snapchat among others. Over time, the hundreds of million of users of these apps gained direct access to the technology — increasing its usecase across age-groups.
Owing to this spike in GenAI use, the FTC wishes to see how platforms offering such chatbots manage operations.
Just weeks ago, for instance, a teen died by suicide in the U.S. and his parents blamed ChatGPT for validating his self destructive thoughts. OpenAI has been roped into a lawsuit as part of this case. While the AI firm claimed that ChatGPT is trained to direct suicidal users to seek professional help, it did acknowledge that a large number of users have been turning to the chatbot for emotional support.
Earlier this year, OpenAI CEO Sam Altman had also revealed that because ChatGPT conversations lack legal protection, they could be used as legal evidences in lawsuits.
The FTC has now asked GenAI platforms to report with examples, how they test and monitor for negative impacts on user engagements. Additionally, the federal agency has asked for details on the type of advertising strategies being used by these platforms to inform users about their features, capabilities, and data handling capabilities.
U.S. President Donald Trump wishes to position the country at a vantage point for AI development and use. This fresh directive from the FTC could indicate that after crypto, the U.S. is now ramping efforts to understand the loopholes in current AI-related practices and policies that may need refinement.
The FTC has granted a period of 45 days within which the companies running GenAI platforms have to submit this report.