“A Full Plate”: FTC’s Open Meeting on PPE, AI, Privacy and Online Harm

At a highly anticipated Open Commission Meeting announced by Commission Chair Lina M. Khan, the Federal Trade Commission (“FTC”) voted to issue one new policy statement and one new report to Congress.

First, the Commission voted unanimously to issue a policy statement on FTC initiatives to investigate pharmacy benefit administrators and other intermediaries, especially regarding discounts and fees paid by drug manufacturers to intermediaries on prescription drugs. The FTC’s presentation on this matter emphasized the Commission’s belief that these benefits are provided in exchange for favorable terms for those who provide the benefits that result in the foreclosure of the cheapest drugs from the market at the expense of the public. These alleged anticompetitive theories follow the Commission’s advice Announcement on June 7e of the launch of its research into the brokering of prescription drugs.

Second, the Commission voted 4-1 to approve and publish a report to Congress evaluating how artificial intelligence can be used to combat harm online. According to the Commission, this report provides an overview of the solutions that artificial intelligence can provide, its drawbacks, and the ways in which social media companies are currently building and using artificial intelligence. Ultimately, the report warns against recommending or mandating the use of artificial intelligence to combat harm online, because the technology instead aggravates online harm, rather than combating it.

The report identified three areas of concern regarding AI:

  1. inaccuracy† According to the FTC report, algorithms are often inaccurate because they are developed incorrectly or use erroneous data.
  2. Prejudiced The FTC report found prejudice that resulted in discrimination against certain protected classes.
  3. Privacy† The FTC report found that AI tools can encourage and enable commercial surveillance and data extraction practices that violate consumer privacy.

Chairman Kahn, Commissioner Slaughter, Commissioner Wilson and Commissioner Bedoya voted to approve and publish the report, and these commissioners expressed concern about current data collection practices, discriminatory software development and privacy issues associated with the development and use of artificial intelligence. Commissioner Phillips disagreed, noting that he believed the report fell short of what Congress had asked for because it doesn’t focus on the benefits of artificial intelligence and instead denounces the technology without taking it into account. with the perspectives of those using artificial intelligence to fight harm online. The adoption of this report reflects the Commission’s skepticism about artificial intelligence, especially regarding the methods used to develop it, and includes concerns about privacy and prejudice, as well as possible exclusionary uses of such technology.

We will continue to provide updates here as new developments arise.

Special thanks to summer employee Logan White for contributing to this post.

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