DOJ and FTC enforcing against AI monopolies now---action from the two agencies now is the only way to solve

The United States Department of Justice and the Federal Trade Commission (FTC) have reportedly reached a deal on how they will pursue an antitrust investigation into tech giants Microsoft, Nvidia, and OpenAI.

The companies are all major players in generative artificial intelligence: OpenAI is the nonprofit startup behind ChatGPT, the blockbuster AI-powered chatbot. Microsoft, the world’s largest company by market capitalisation, has invested more than $13bn in OpenAI and holds a 49 percent stake in the company’s for-profit subsidiary.

Chipmaker Nvidia is a global leader in graphic processing units (GPU), a key piece of hardware needed in AI. The company recently hit a $3 trillion valuation, surpassing Apple to become the world’s second-largest company.

US authorities likely want to determine if the tech giants used anticompetitive means to dominate the burgeoning AI industry.

Under the terms of the deal, which was reported by multiple US media outlets, the FTC will reportedly investigate Microsoft and OpenAI, while the DOJ will probe Nvidia.

What is the US government going to be investigating?

US regulators – as well as observers outside the government – are concerned about the dominance of a handful of companies over the industry and whether it will edge out smaller competitors and startups with unfair business practices.

The US government has previously investigated Google’s monopoly over search engines and the dominance of Meta over social media in light of its ownership of Facebook, Instagram, and WhatsApp.

The cases are part of a major policy shift in the US over the past five years towards favouring more regulation after years of pro-market attitudes, according to Dirk Auer, director of competition policy at the International Center for Law & Economics in Portland, Oregon.

“Enforcers both in the United States and in the European Union are very keen to bring cases in the generative AI space. The way they see it, this is the next big thing, and they think, rightly or wrongly, that they failed to bring competition cases in the early years of Web 2.0 and that led to more concentration in less competitive markets than would otherwise have been the case,” Auer told Al Jazeera.

Why are the investigations being split between two government agencies?

Both the FTC and the DOJ are responsible for enforcing federal antitrust laws.

The DOJ is a criminal enforcement agency while the FTC is a civil enforcement agency, but their work can overlap. Before launching an antitrust investigation, the two agencies are required to notify each other, since they share responsibilities.

The two agencies worked together on a milestone case in 2019 against Facebook, Amazon, Apple, and Google parent company Alphabet that resulted in each of the tech firms being sued for allegedly violating antimonopoly laws.

Experts say an investigation against Microsoft, Nvidia, and OpenAI could take a similar approach.

Why are they taking action now?

Barry Barnett, an antitrust lawyer at US firm Susman Godfrey, said both enforcement agencies may be acting before the statute of limitations runs out or seeking to make progress in their inquiries well in advance of the US presidential election in November.

There may also be a “dawning sense that Congress lacks the cohesion and will to enact legislation that provides a regulatory alternative to litigation against firms that dominate the AI ecosystem”, Barnett told Al Jazeera.