FTC Issues 6(b) Orders to Generative AI, Cloud Computing Service Companies | Practical Law

FTC Issues 6(b) Orders to Generative AI, Cloud Computing Service Companies | Practical Law

The Federal Trade Commission (FTC) issued orders to Alphabet, Inc., Amazon.com, Inc., Microsoft Corporation, Anthropic PBC, and OpenAI, Inc. asking for information related to recent transactions involving generative Artificial Intelligence (AI) companies and cloud computing service providers. The FTC issued the orders under Section 6(b) of the FTC Act, which authorizes the FTC to conduct wide-ranging studies that do not have a specific law enforcement purpose.

FTC Issues 6(b) Orders to Generative AI, Cloud Computing Service Companies

Practical Law Legal Update w-042-1112 (Approx. 3 pages)

FTC Issues 6(b) Orders to Generative AI, Cloud Computing Service Companies

by Practical Law Antitrust
Published on 25 Jan 2024USA (National/Federal)
The Federal Trade Commission (FTC) issued orders to Alphabet, Inc., Amazon.com, Inc., Microsoft Corporation, Anthropic PBC, and OpenAI, Inc. asking for information related to recent transactions involving generative Artificial Intelligence (AI) companies and cloud computing service providers. The FTC issued the orders under Section 6(b) of the FTC Act, which authorizes the FTC to conduct wide-ranging studies that do not have a specific law enforcement purpose.
The Federal Trade Commission (FTC) issued orders to five companies asking for information related to recent transactions involving generative Artificial Intelligence (AI) companies and cloud computing service providers. The FTC issued the orders under Section 6(b) of the FTC Act, which authorizes the FTC to conduct wide-ranging studies that do not have a specific law enforcement purpose, but that are often precursors to enforcement actions.
The order recipients are:
  • Alphabet, Inc.
  • Amazon.com, Inc.
  • Microsoft Corporation
  • Anthropic PBC
  • OpenAI, Inc.
The orders are seeking information related to:
  • Google's partnership with and investment in Anthropic.
  • Amazon.com's partnership with and investment in Anthropic.
  • Microsoft's partnership with and investment in OpenAI.
Specifically, the FTC is seeking:
  • Information on the strategic rationale behind the partnerships and investments.
  • Information on the nature and extent of each partnership, the dates of regular meetings between the companies, any oversight or governance rights, and the partnerships' decision-making processes, particularly with respect to:
    • new products and services;
    • product or service discontinuation;
    • product and service pricing;
    • who has access to products and services; and
    • personnel.
  • Analyses and reports prepared for evaluating the partnerships' impact or potential impact on competition and potential for expansion.
  • Documents and agreements, including exclusivity agreements, related to:
    • any line of business;
    • privileged access to products or services;
    • restrictions or conditions on pricing, access, strategy, or other terms;
    • competitive conditions for generative AI products and services and cloud computing services; and
    • the companies' abilities to provide generative AI and cloud computing services.
  • Any and all materials provided to other government entities related to any investigation into any of the above.
The companies have 45 days from the date they received the order to respond.
For more on the FTC's authority, see Practice Note, US Federal Trade Commission: Overview.