Inside AI Policy

February 24, 2024

AI Daily News

Tech sector think tank accuses FTC of regulatory overreach in Copyright Office inquiry of AI

By Charlie Mitchell / January 23, 2024

The Information Technology and Innovation Foundation, a nonprofit tech-sector think tank, unleashes a barrage of criticism at the Federal Trade Commission for its comments in a U.S. Copyright Office inquiry on artificial intelligence, saying the FTC is taking positions outside its jurisdiction that threaten the competitive development of AI technology.

“Not only is the FTC overreaching into areas beyond its regulatory purview -- it has no jurisdiction over copyright issues -- but imposing additional restrictions on the use of creative works in AI beyond existing copyright law will undercut competition. Congress should remind the FTC that questions about the copyright implications of emerging technologies, including AI, should be left to the Copyright Office,” ITIF says in a Jan. 22 blog post.

The Copyright Office in August issued a notice of inquiry as it examines whether additional regulations or legislation are needed to protect the data, images and other information taken from the internet to train generative AI models. The deadline for initial comments was Oct. 30 and reply comments were due Dec. 6.

Numerous reply comments addressed the FTC’s submission and its potential role in copyright issues. Industry groups and some academics were sharply critical of the FTC, while a handful of groups representing musicians, creators and other “rightsholders” supported the commission.

The FTC in its Oct. 30 submission to the Copyright Office said it is focused on potential consumer harms related to “AI-created product[s]” and that it will exercise its authority to protect consumers and competition in the copyright area even amid regulatory activity by other agencies.

“The use of AI technology raises significant competition and consumer protection issues beyond questions about the scope of rights and the extent of liability under the copyright laws,” the FTC said.

ITIF in its new blog post cites “several troubling claims” in the FTC comments to the Copyright Office.

“First, the FTC says ‘conduct that may violate the copyright laws…may also constitute an unfair method of competition or an unfair or deceptive practice’ and gives, as an example, ‘training an AI tool on protected expression without the creator’s consent,’” ITIF says.

“However,” ITIF says, “the FTC’s example conflicts with the fair use doctrine. The fair use doctrine permits the unlicensed use of copyright-protected works under certain conditions, such as for criticism, commentary, news reporting, teaching, scholarship, or research. This allowance is crucial as it safeguards free speech and fosters the advancement of science and the arts.”

Next, the tech group says, “the FTC expresses concern about someone ‘mimicking the creator’s writing style, vocal or instrumental performance.’ However, here again, the conduct is likely permissible under copyright law. The essence of creativity often involves studying and drawing inspiration from existing works.”

“Finally,” ITIF says, “the FTC presents the risk that LLMs could potentially ‘diminish the value of [a creator’s] existing or future works.’ In some cases, this may be true. For example, some LLMs probably produce more interesting and engaging writings than many unpopular, self-published authors. The ability to produce creative works more efficiently with AI may reduce what some people are willing to pay for these works (something the FTC should welcome). But AI may also enhance value for many creators, such as by allowing them to produce commercial works more efficiently.”

Further, the group says, “FTC is proposing a no-win scenario by arguing that companies are acting unfairly by not paying for content available under fair use, but also saying it would likely be unfair if firms had to pay because only large firms would be able to do so.”

ITIF concludes, “The FTC’s comments to the Copyright Office extend beyond its original mandate and reflect its deep and ongoing animus towards large U.S. technology companies. By challenging the existing copyright framework, the agency risks stepping outside its regulatory bounds and inadvertently hindering the innovation and competition it is meant to protect. … The public will fare better if courts decide copyright issues.”