AI & Competition Law: What Are the Challenges and Opportunities?

In an era defined by rapid technological advancement and digital transformation, the interplay between artificial intelligence (AI) and competition law has emerged as a critical focal point. CPI’s inaugural European conference “Dynamic Competition in Dynamic Markets: Charting the Path Forward?“, held at SDA Bocconi School of Management, brought together experts to dissect the multifaceted landscape of AI innovation, regulation, and its implications on competition dynamics. Marco D’Ostuni, Partner at Cleary Gottlieb Steen & Hamilton, moderated the panel and set the stage by emphasizing the broader spectrum of AI beyond algorithmic pricing. He underscored AI’s potential to drive innovation, introduce new services, and create diverse content forms, while also highlighting concerns surrounding market concentration and regulatory dilemmas.

One of the pivotal questions surrounding the advancement of AI is whether it will exacerbate market concentration, potentially leading to a tipping point favoring a ‘winner takes all’ scenario. The answers to these questions hold significant value globally”

Brando Benifei, a Member of European Parliament and a key figure in negotiations on the recently approved European Artificial Intelligence Act, provided insights into the legislative framework. Benifei outlined the Act’s evolution from its original draft, emphasizing its focus on transparency, risk reduction, and mandatory compliance. He elaborated on the Act’s provisions, including the identification of high-risk use cases, prohibition of certain AI applications, and measures to support market entry for new businesses.

The law is based on establishing an orderly system of regulations rather
than relying solely on voluntary commitments or codes of conduct.”

Amba Kak, Executive Director at AI Now, shared perspectives from the United States, reflecting on the evolving regulatory landscape and the intersection of AI with broader policy domains. Kak highlighted the FTC’s recent AI summit and its implications for enforcement and policy positioning, underscoring the need for a holistic approach that integrates competition, privacy, and accountability considerations.

If there’s one key takeaway, it’s the realization that the hype surrounding AI is fueling demand for cloud services, ultimately consolidating advantages for three dominant companies.”

The discussions underscored the global nature of AI regulation and the imperative for coordinated efforts to address emerging challenges. Stefano Firpo, Director General at Assonime, highlighted questions of industrial policy in Europe, emphasizing the need for complementary measures to foster competitiveness while ensuring consumer and worker protections.

As we know, AI is accelerating what I consider a new industrial revolution. Why a new industrial revolution? Because this, as with all the revolutions in history, is based on a new production factor, and this new factor is data.”

Andrea Appella, Associate General Counsel for OpenAI, provided insights into the various competition law investigations and market studies across Europe, emphasizing the need for adaptive regulatory frameworks that balance innovation with market integrity in a forward looking manner. He also made a point about the current situation, saying, “The AI landscape is very dynamic and competitive with new AI models and programs being developed and deployed by many companies. Authorities want to learn, but are also vigilant.”

The AI landscape is very dynamic and competitive with new AI models and programs being developed and deployed by many companies. Authorities want to learn, but are also vigilant”

The discussion encapsulated the complexities of navigating AI’s transformative potential within the framework of competition law. As technological advancements continue to reshape markets, stakeholders remain vigilant in addressing regulatory gaps and fostering an environment conducive to innovation, competition, and societal well-being. The panel underscored the importance of collaborative efforts in charting a path forward that harnesses the benefits of AI while mitigating its risks.