Fair Trade Commission Launches AI Survey Targeting OpenAI, Nvidia, Naver, and Others

Understanding Transaction Relationships and Competitive Situations Among Major Generative AI Businesses

[Image source=Reuters Yonhap News]

The government has launched a fact-finding survey to analyze the structure of the artificial intelligence (AI) market and the potential for unfair trade practices. The survey targets major domestic and international players leading the AI market, including OpenAI, Microsoft (MS), Nvidia, and Naver. With generative AI, triggered by 'Chat GPT,' emerging as a game changer poised to reshape the market landscape, the aim is to examine possible monopolization and unfair practices in this market, such as price collusion, false advertising, and entrenchment of dominant positions.

On the 1st, the Korea Fair Trade Commission (KFTC) announced, "We are initiating a market fact-finding survey targeting major domestic and international players in the AI sector," adding, "About 50 companies engaged in the development and sale of AI-related products and services for domestic customers will be surveyed." To this end, the KFTC will send written questionnaires to the companies under investigation and request data within the necessary scope.

The KFTC's survey targets are expected to include foundation model developers such as OpenAI, Microsoft (MS), Google, Meta, xAI, and Apple, as well as major domestic platform companies like Nvidia, which monopolizes AI semiconductors, and Naver-Kakao.

The main survey items cover general business status, product and market conditions, transaction status by AI-related fields, and experiences of unfair trade practices. The survey aims to comprehensively understand transaction realities, competitive relationships, and detailed market structures among businesses. Both dominant and subordinate relationships within the AI industry will be examined. Prior to the full-scale survey, the KFTC selected the survey targets and items through literature reviews and consultations with academia and industry.

The KFTC explained, "Due to the characteristics of AI technology requiring large-scale capital and computing infrastructure, issues such as high market concentration resulting from competitive advantages held by a few companies and potential entry barriers to key production factors have emerged as various competition law concerns. Major competition authorities and international organizations have also begun analyzing the AI market or publishing reports, showing high interest in the AI sector."

Along with the KFTC, overseas competition authorities such as the U.S. Federal Trade Commission (FTC) and the U.K. Competition and Markets Authority (CMA) view the rapid expansion of the generative AI market as a potential source of various anti-competitive behaviors. These include price collusion using algorithms, widespread dissemination of false, exaggerated, or deceptive advertising, and disadvantages to content providers caused by indiscriminate collection and training on vast amounts of data for AI learning. They also point out the risk of big tech companies like MS, Google, and Apple, which have traditionally dominated the market, entrenching their market power, extending dominance into adjacent markets, and hindering new entrants.

Based on the results of this fact-finding survey, the KFTC plans to explore competition policy directions that will sustain innovation and fair competition in the AI market. Additionally, to enhance predictability for AI market participants and foster a more competitive and consumer-friendly market environment, the KFTC will publish an 'AI Policy Report' in December this year after consulting with academia and external experts.

This content was produced with the assistance of AI translation services.