OpenAI Faces Federal Trade Commission Investigation for Data Privacy Violations and Misleading ChatGPT Responses
OpenAI, the company behind the widely-used conversational AI tool ChatGPT, is currently under investigation by the Federal Trade Commission (FTC) regarding potential violations of data privacy laws and the dissemination of false information by the chatbot. While ChatGPT has gained significant attention for its impressive capabilities, its journey to the top has not been without controversies.
The FTC has sent a 20-page document titled "Civil Investigation Demand" to OpenAI, requesting access to the company's records to evaluate how it addresses the risks associated with its AI models. This investigation marks a significant confrontation between the AI company and a regulatory agency in the United States. The document specifically asks OpenAI to clarify the methods employed to acquire the data used for training the Large Language Models that power ChatGPT, including possibilities such as data scraping or data purchases from third parties.
To clarify, data scraping refers to the automated process of extracting information from publicly available websites for various purposes, such as training AI models or targeted advertising. While data scraping is generally allowed in the U.S., there have been recent cases like Twitter's lawsuit against four unidentified entities for excessive data scraping.
In response to the investigation, OpenAI's CEO, Sam Altman, expressed the company's willingness to cooperate with the FTC in order to demonstrate that the technology used in ChatGPT and other products is both safe and consumer-friendly.
The FTC's document also requests that OpenAI explain the measures taken to assess the accuracy of ChatGPT's responses and whether the chatbot has the potential to make misleading statements about individuals. This aspect of the investigation aims to determine if the chatbot could have been trained to harm people's reputations. The FTC also seeks insights into OpenAI's products and their marketing strategies, as well as information about the preparation process for new product launches.
If found guilty of the allegations, OpenAI could face fines imposed by the FTC or be required to enter into a consent decree, which would define how the company handles data. Notably, last month, Amazon was fined $25 million for non-compliance with child data privacy laws, and other tech giants such as Meta and Twitter have also faced fines for similar offenses.
Apart from the issues related to data privacy and potential errors by ChatGPT, the FTC also demands that OpenAI provide records regarding a bug incident that occurred in March of this year. This incident briefly exposed the chat history and payment records of active users. OpenAI clarified that the incident only revealed limited information, such as the names, email addresses, payment addresses, credit card types, and the last four digits of credit card numbers. Full credit card numbers were not exposed at any time.
Although OpenAI's statement indicates that the incident affected 1.2% of ChatGPT Plus subscribers, the FTC has requested specific numbers of affected users, the number of complaints received in relation to the incident, any policy modifications implemented since the event, and additional details. The European Union (EU) recently enacted AI regulation legislation that emphasizes data privacy and imposes substantial fines on companies that violate regulations.
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