Generative AI Tools Face Regulatory and Litigation Backlash, OpenAI Under Investigation
Generative AI tools, like ChatGPT, have gained significant attention in recent years. However, the use of these tools raises concerns about data protection. European data protection authorities have been taking actions to ensure that OpenAI, the company behind ChatGPT, appropriately handles personal data obtained through the platform. Now, the United States is joining in with regulatory and litigation actions against OpenAI, expanding the international scope of the backlash.
The main issue in the US developments revolves around the extensive use of personal data, allegedly scraped from the internet, to train OpenAI’s products. Investigations and class actions highlight the moral, legal, and ethical concerns surrounding the development of generative AI tools.
Federal Trade Commission Investigation
The US Federal Trade Commission (FTC) has recently started an investigation into OpenAI. The investigation aims to gather detailed information about how OpenAI addresses the risks associated with its AI models. The FTC is interested in determining whether OpenAI has engaged in unfair or deceptive privacy or data security practices, as well as practices that may harm consumers, including reputational harm. This investigation sheds light on the regulatory pressures faced by AI platforms like OpenAI.
Class Actions
Several class actions have been filed in the US against OpenAI and other companies involved in AI system development. These lawsuits mainly focus on the alleged improper acquisition and use of data and images for training AI platforms.
Northern District of California Class Action
One significant class action has been filed in California against OpenAI and Microsoft. Microsoft is included as a defendant because it integrated OpenAI’s technologies into its software and services. The plaintiffs, who have chosen to remain anonymous, are claiming $3 billion in damages. This action stands out as one of the first AI-related class actions that goes beyond intellectual property infringement. The complaints include violations of unfair competition, privacy, consumer fraud, and deceptive business practices laws in Illinois and California.
The lawsuit alleges ongoing harms caused by OpenAI’s products such as privacy violations, misinformation campaigns, malware creation, and autonomous weaponry. The class action argues that OpenAI obtained personal information by scraping the internet without consent, ignoring established protocols for data purchase and use. The personal data includes accounts, names, contact information, and payment details. This case highlights the privacy concerns associated with the exposure of users’ and non-users’ personal information.
Authors Class Action
Another class action has been filed against Meta and OpenAI in San Francisco by authors Sarah Silverman, Richard Kadley, and Christopher Golden. They claim that OpenAI trained ChatGPT using copyrighted works without consent, credit, or compensation. The action against Meta is similar in nature.
Getty UK/US Action Against Stability AI
In the UK, Getty Images is pursuing a claim against an AI image generator called Stability UK. Getty alleges unlawful use of copyrighted photographs to train the AI tool. Similar litigation was filed in the US, and a class action complaint has been filed in San Francisco by artists who believe their work has been used to train the Stability AI tool.
Implications for Companies in the UK
The outcomes of these cases in the US might have significant implications for companies globally. If access to ChatGPT and other OpenAI products is temporarily frozen, companies worldwide could be affected. Alternatively, tighter security and controls on the use of personal data might be required, which could slow down the development of generative AI tools. OpenAI’s alleged use of personal data collected through web scraping without users’ consent raises concerns about future consent requirements and their impact on AI tool development.
Editor’s Notes
The regulatory and litigation backlash against generative AI tools, particularly OpenAI’s ChatGPT, is escalating in the United States. Investigations by the FTC and class actions filed against OpenAI and other companies highlight the concerns surrounding data protection and privacy. The outcomes of these cases could shape the future of AI development and usage globally. It is crucial to closely follow the developments in this area and how they align with data protection regulators around the world.
About Hans Allnutt and Astrid Hardy
Hans Allnutt is a partner at DAC Beachcroft, an international law firm based in London. He leads the firm’s cyber risk and breach response team. Astrid Hardy is a solicitor for the same firm.
Editor’s Note: This article was originally published on GPT News Room. Visit their website for more news and insights on AI and technology.
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