Title: 3 Ways ChatGPT May Have Negative Financial Implications, Says FTC Probe
The Federal Trade Commission (FTC) is currently investigating OpenAI, the company behind ChatGPT, for potential violations of consumer protection law. Regulators are increasing their efforts to establish a framework that safeguards consumers’ interests. A leaked document, initially obtained by The Washington Post, reveals that the agency is examining whether the company’s practices breached Section 5 of the FTC Act by engaging in unfair or deceptive actions that could harm consumers, including reputational damage.
Following this news, OpenAI CEO Sam Altman expressed disappointment over the leak on Twitter. However, he emphasized the company’s commitment to ensuring the safety and consumer-centered nature of their technology while complying with the law. Altman highlighted that ChatGPT underwent extensive safety research, with a further six-month period dedicated to refining its alignment and safety measures before release. OpenAI also stated that it prioritizes user privacy and structures its systems to acquire knowledge about the world, not private individuals.
The FTC’s civil investigative demand (CID) encompasses several information requests directed at OpenAI, focusing on potential financial effects. The agency intends to investigate misleading statements about individuals that could harm companies, personal brands, and subsequently impact their earning potential. The CID asks the company to provide details about the actions taken to mitigate the risks of generating false, misleading, or disparaging statements concerning real individuals.
Additionally, the CID seeks information regarding a bug OpenAI disclosed in March. This bug inadvertently exposed payment-related data of approximately 1.2% of active ChatGPT Plus subscribers during a specific nine-hour period. OpenAI promptly addressed the issue, stating that only limited payment details, such as the last four digits of credit card numbers, were visible to affected users. Full credit card numbers were not exposed during this incident.
The FTC has repeatedly expressed concerns regarding potential discrimination. In April, several federal agencies, including the Consumer Financial Protection Bureau, the Department of Justice, the Equal Employment Opportunity Commission, and the FTC, collaborated to issue a joint statement and guidelines. Their purpose was to emphasize that new technologies should not have exemption from civil rights laws and should not engage in unlawful discrimination. Discrimination may occur in various areas, including housing, employment, and lending.
Phil Siegel, founder of the Center for Advanced Preparedness and Threat Response Simulation (CAPTRS), highlighted the potential financial consequences of unfair hiring practices. He also mentioned the risk of generating false or unjustified responses, known as hallucination in the context of large language models, posing personal harm in areas such as healthcare, reputation, and financial services. Siegel additionally cautioned that since the model might be trained on outdated data, personal information could not only be misused but also inaccurate or out of date.
The FTC’s probe into OpenAI’s operations aims to ascertain whether the company has indeed engaged in unfair or deceptive practices that could harm consumers. By examining potential reputational risks, data breaches, and discriminatory outcomes, the FTC is striving to establish safeguards and protect consumers from financial harm. OpenAI has expressed its willingness to cooperate and ensure the safety and pro-consumer nature of its technology.
