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Competition watchdog responds to AI regulation with top concerns

AI competition
Image credit: T. Schneider via Shutterstock

The UK competition watchdog has responded to the recent AI regulatory white paper, warning of the potential competition risks that the technology poses.

In March, the government published its sector-specific AI white paper in the first attempt to get a handle on implementing regulation for the rapidly growing technology.

The Competition and Markets Authority (CMA) has published its response, in which it agreed that ironing out safe regulation for AI should be a high priority.

The regulator also explained its own concerns over AI within its remit of competition protection.

The CMA warned that in the case of AI, consumers “may not be in a position to assess technical functioning or security of the product”, creating a greater challenge for the group.

“Making sure that AI is appropriately transparent and explainable is well aligned with our competition and consumer protection objectives,” said the CMA.

The CMA explained that consumers must always be made aware of cases in which the “use of AI influences their decision-making when making choices and decisions about products and services online”.

It further warned that consumers should not be misled into thinking AI recommendations are objective “for options based on relevance or another criteria valued by consumers, when in fact the recommendations are primarily influenced or determined by payments or profitability to the firm”.

The CMA then highlighted transparency as a key concern saying “where firms with enduring market power over gateway positions operate AI systems that have substantial influence over other firms’ access to customers and economic success”, the firms in question must be transparent in how their systems work.

It offered the example of firms not properly be recommended or ranked properly on ranking and comparison services.

“Relevant transparency for these purposes could take the form of guarantees that no self-preferencing or undue discrimination is occurring against competitors, or that provided data is being used only for certain purposes – these could be important assurances for market participants.”