May 24, 2024

FTC Chair Lina Khan says AI could “turbocharge” fraud, be used to “squash competition”

Federal Trade Commission Chair Lina Khan is leading the Biden administration’s charge against massive tech companies allegedly looking to gobble up the competition. 

One area Khan is focused on is artificial intelligence, which she believes is an emerging threat to the American consumer. 

“We are seeing risks that AI could be used to turbocharge fraud and scams,” she told CBS News. 

“We’re also looking to be vigilant to ensure that we don’t see anti-competitive practices or unfair methods of competition where some of the larger firms that have an advantage in this market are not using that power to squash competition,” she said.  

Since President Biden appointed Khan to chair the FTC in 2021, making her the youngest person to ever hold the position at 32,  she has taken on trillion-dollar corporations including tech giants Amazon, Microsoft and Meta. She argues that bigger isn’t always better — for the little guy.

“When you have open markets, you want them to be contestable, which means that the existing giants have to be susceptible to competition,” said Khan. 

She said “there are a whole set of antitrust lawsuits underway right now … that allege … some of these companies have engaged in anti-competitive tactics that have unfairly blocked competition.”

The FTC, she said, is on “the front lines” of protecting the American public from unlawful business practices, fraud and scams. It also works to protect people “from monopoly power that can lead to higher prices, lower wages, less innovation.” 

This year, federal judges handed the FTC high-profile defeats in cases against Microsoft and Meta. 

Khan said despite the high-profiles losses, she is “very proud of the wins” that the FTC has had both in blocking mergers and in suing to prevent anti-competitive conduct.

Last month, the FTC filed a lawsuit against Amazon, accusing the company of a years-long effort to enroll consumers into Prime without their consent and making it difficult for them to cancel the subscription.

Amazon said the FTC”s claims are “false on the facts and the law” and that “by design” it made it “clear and simple for customers to both sign up for or cancel their Prime membership.” It also pointed to high customer satisfaction.

“The goal is really to be ensuring that our markets are open, that if there is a new firm with a good idea, maybe even a better idea, that they’re not being locked out of the market,” Khan said. 

At issue is whether to check companies before they get too big or after they have. Tech giants say not only are they not monopolies, but technological change means they’ll always be open to competition. 

Khan is also working to eliminate non-compete clauses in employment contracts, which anyone from fast food workers and healthcare workers to engineers and journalists could have. Such clauses can limit workers’ ability to get another job with better wages and benefits.

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