Monday, September 26, 2022

Does Artificial Intelligence Affect the Competitiveness of Companies?


Artificial Intelligence (AI) affects our lives with unprecedented speed and scope.

A few days ago I explained in this space how we can benefit from the use of these technologies and the challenges they face to our privacy and security as consumers. On this occasion I will tackle how data affects the development and use of these systems and the challenges they face in the context of competition.

The data that is fed to AI can be used for a variety of purposes, from improving or customizing products to selling them to third parties. Companies are increasingly harnessing the power of AI algorithms and the vast availability of data to guide their decisions, identifying which products to recommend and what types of users based on their Internet searches and buying preferences. But let’s adjust inventory and prices in real time, as well as define advertising recruitment criteria and even future investments.

Currently, a small group of companies including Google, Facebook, Amazon, Apple, Microsoft and IBM compete in the development of AI and thus enjoy a significant advantage: access to a large amount of data, and their dominant position . The same, to access critical information in the markets of Information and Communication Technology (ICT) and infrastructure, electronic commerce, digital media and entertainment, payments, advertising, etc.

But why might access to data obtained through AI systems be a competition problem? In 2021, the Japan Fair Trade Commission (JFTC) warned that the benefits of data accumulation could hinder the entry of new companies to the extent that they would be inaccessible.

Although data hoarding may not be competitive, once it reaches a critical mass it is possible that no rival company will be able to compete with it in the market.

In addition, the collection and processing of data is also associated with other risks to competition such as: risks of collusion between companies due to the use of algorithms, abuse of dominance by companies that developers of AI, creation of new barriers to entry and mergers. Data merger or data-driven merger is a merger between companies with large amounts of data, high processing capacity, and synergy in the information received.

Given these challenges, competition authorities around the world are very active in investigating and approving mergers of big data and technology companies.

Today we have a large number of regulatory initiatives around the world in the area of ​​artificial intelligence and digital markets.

In the context of AI, the European Commission adopted a resolution in 2021 for a regulation on “artificial intelligence systems” that prohibits the development and use of AI when it violates human rights, and directly regulates cases in which markets can be manipulated. risks are identified. Such initiatives also exist in the United Kingdom (AI Strategy, 2022) and the United States (via a memorandum published by the Federal Trade Commission: The Objective of Truth, Fairness and Equality in the Use of Information). your company by AI). Other initiatives are found in Brazil, Canada, Chile, Colombia and Peru.

Mexico adopted the IA-MX-2018 strategy to develop a governance framework, among other objectives.

With regard to the regulation of digital markets, the European Union and the United Kingdom are the ones that have made significant progress in this area. The European Commission recently approved a digital market law targeting a specific list of “access platforms” and digital services legislation.

In the United Kingdom, a digital market unit is already operating in the Competition and Markets Authority (CMA), through which a set of tools are proposed to address the problems of competition. In this model, which has served as a reference for other regions of the world, we should not lose sight of the fact that the market unit works closely with that country’s telecom regulator Ofcom. The same plan should be followed in Mexico.

Continuing the efforts made to regulate digital markets, Canada stands on our continent by creating the Canadian Competition Bureau, an office specialized in digital markets; While in Asia, the JFTC established guidelines for companies that collect data from their commercial counterparties, consumers or their business combination.

As we can see, the development and application of AI-based technologies is progressing faster than the optimization of standards and theoretical knowledge of these phenomena. Competition policy and enforcement frameworks may not be adequately equipped to address the impact of these systems on market dynamics; Therefore, the IFT Roadmap 2021-2025 considers the analysis of the potential impacts of these new technologies from all angles.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.

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