GVH Notice of launch of a market analysis on the "Assessment of the impact of artificial intelligence on competition and consumers"
1. Topicality of the subject
Artificial Intelligence (AI) is increasingly affecting many aspects of our lives. AI is a rapidly evolving family of technologies that can contribute to a wide range of economic and social benefits across a spectrum of sectors and societal activities, but also presents risks. With the rapid development of AI-based tools and their integration into various platforms and other digital services, they will increasingly become part of everyday life, not only for users and businesses, but also, in time, for public administrations. By improving forecasting, optimising operations and resource allocation, and customising the digital solutions available to individuals and organisations, the use of AI can provide businesses with a key competitive advantage, delivering social and environmental benefits in areas such as health, agriculture, education and training, infrastructure, energy, transport and logistics, public services, security, justice, resource and energy efficiency, and climate change mitigation and adaptation.
However, the recent explosion in the uptake of AI, and the urgency with which developers are pushing it to market, may create unforeseen problems.
The problem may be that AI is a technology in its infancy, requiring enormous resources to develop, resources that only the largest technology companies have. Access to AI could therefore easily become a privilege for a narrow group of companies, who could limit competition in their markets.
AI can put consumers in a vulnerable position by taking the collection and use of consumer data to a new level, as well as the use of dark patterns and personalised advertising/offers. A particular potential risk of chatbots, the most prevalent AI technology today, is that due to their conversational nature, it may not always be clear to consumers whether the responses given by the chatbot are solely responses gathered from relevant sources or whether they also contain paid advertisements.
There is a sense that AI is at the heart of today's digital revolution and is a priority area for various authorities and legislators around the world. Several European competition authorities have already examined the impact of AI on competition.
At the end of October 2023, the European Commission endorsed the G7 leaders' agreement on international guiding principles for AI and the Hiroshima process on a voluntary code of conduct for AI developers. These Principles and the provisions of the Voluntary Code of Conduct are expected to complement the legally binding rules at international level that EU lawmakers will finalise in the context of the draft AI law.
The European Commission's draft AI legislation has already been submitted to the European Parliament and the Council on 21 April 2021 and is expected to be adopted in the near future. In December 2023, the European Parliament and the Council reached a political consensus on a regulation for the functioning of AI in the Commonwealth, making the EU the first to regulate this area, which has been a major challenge for policy makers, politicians, lawyers and technologists alike in the last year or two.
2. The purpose of the market analysis
The aim of the market analysis is to gain a better understanding of the deployment of ICT, its diffusion among domestic market players and its impact on market competition and consumer behaviour. This is particularly important as AI is likely to become increasingly relevant in future competition proceedings (the GVH is currently conducting proceedings against Microsoft).
It also appears that some competition authorities have already carried out market analyses in this area for similar purposes.
3. Investigative steps of the proposed market analysis
The GVH envisages several investigative steps in the market analysis. In the first instance, it plans to consult with national professional organisations and academic actors (e.g. MILAB - National Laboratory for Artificial Intelligence) to establish the basis for the topic and to map the markets concerned by AI. Based on and following these, three main types of investigation steps are planned.
Firstly, a desk research type study will be needed to identify international practices and experiences. This will require a detailed review of the work of other competition authorities, the AI strategies of national and EU countries and reports on this topic.
Secondly, as in previous market analyses, the study plans to commission an external market research company to identify domestic business practices. This will essentially involve in-depth interviews to map the use of AI in the country by both businesses and consumers, to assess the opportunities, problems, challenges and implementations in the country, and to understand consumer perceptions of AI.
Thirdly, the GVH plans to use data request questionnaires to contact large technology companies (e.g. Google, Microsoft) and developers of currently available generative AI models (e.g. OpenAI) to get a comprehensive picture of their functioning and their developers' views on the competition and consumer implications.
4. Scheduling
The planned timing of the market analysis is summarised in the table below.
Task
Deadline
Launch of the market analysis - 4 January 2024
Consultation with national professional organisations, universities - January-February 2024
Implementation of desk research - January-April 2024
Procurement and implementation of market research - January-April 2024
Send out data request questionnaires - February 2024
Receipt and processing of data request questionnaires - April-May 2024
Publication of market analysis study - Mid-July 2024
5. Legal background to the market analysis
Pursuant to the provisions of Section 43/C of Act LVII of 1996 on the Prohibition of Unfair Market Behaviour and Restriction of Competition (Act on the Protection of Competition Act), the GVH may, in order to perform its statutory duties more efficiently and effectively, carry out market analysis, in the course of which it assesses and analyses the functioning of certain markets, market developments and trends, certain market practices and their effects on competition and business partners, in particular final customers, by collecting public information and data based on voluntary responses.
The GVH shall publish on its website the fact that a market analysis has been launched, the markets and market practices to which it relates, the issues covered and the planned timing of the market analysis.
As a result of the market analysis, the GVH will prepare and publish on its website a study setting out the issues examined, the facts and findings of the market analysis, any further action that may be necessary and the methodology used.
In accordance with Art. Pursuant to Article 43/F of the Act, if the results of the market analysis indicate the existence of a market disturbance that cannot be remedied or cannot be fully remedied by means of a competition supervision procedure, the GVH a) may inform the competent committee of the Parliament, the minister or the authority, b) may issue a recommendation, c) may initiate the drafting or amendment of legislation, if necessary.
This is an automatic translation of the GVH Notice.