AI’s regulatory troubles pile up as U.S. prepares antitrust probes and activists target Meta over privacy

Earlier this week I asked you all what you thought about foldable phones—a category that seems to be taking off—and I got some great answers that I’m publishing below. But first, the weather: Storm clouds are gathering on the regulatory front for the AI industry.

In the U.S., antitrust is the issue. According to the New York Times, the Federal Trade Commission and Justice Department have struck a deal to open investigations into the biggest AI players. The DOJ will probe how Nvidia has come to thoroughly own the AI chip market, while the FTC will look into OpenAI and its maybe-BFF Microsoft, which has invested $13 billion into OpenAI in exchange for a cut of its profits (at least, until OpenAI produces superhuman "artificial general intelligence.")

“One of the things to think through is conflict of interest, a thumb on the scale, because [chipmakers] fear enabling a competitor or are helping to prop up a customer,” DOJ antitrust chief Jonathan Kanter told the Financial Times.

In Europe, privacy is the biggest thing today (though regulators are also examining antitrust issues in AI.) As I reported in April, Max Schrems, the Austrian activist-lawyer who has had huge success tackling Meta/Facebook over its assorted privacy violations, has turned his attention to AI. In that case, Schrems’s privacy nonprofit Noyb filed an official complaint against OpenAI, claiming ChatGPT’s hallucinations violate the EU General Data Protection Regulation by handing out incorrect information about people. Now he’s going after his usual target.

Meta recently changed its European privacy policy to let the company use people’s public personal posts and media, and data from other online sources, for an unspecified “AI technology” that can share data with third parties. Noyb says this breaks the GDPR in multiple ways—people can only opt out from having this done, rather than being given the chance to give proper consent with an opt-in; and there’s no clear way for them to have the data deleted once it’s in the system; and it’s illegal to not clearly specify what will happen with the data.

Schrems: “Meta is basically saying that it can use 'any data from any source for any purpose and make it available to anyone in the world', as long as it’s done via 'AI technology.' This is clearly the opposite of GDPR compliance.” Asked for comment, a Meta spokesperson referred me to the blog post the company published when it announced the change to its privacy policy; the post claims that Meta's AI expansion is done “in a responsible way that complies with privacy rules.”

Remember, Schrems has already destroyed two U.S.-EU deals that let American firms process Europeans’ personal data, and recently put an end to Meta’s attempt to charge European users for the privilege of not being tracked online. Remember too that the GDPR’s fines run up to 4% of global annual revenue—a much bigger deal for Meta than for OpenAI.

And now, phones.

A bunch of you are very much interested in trying a foldable smartphone. “If a smaller folded phone would fit better in my pockets, especially in my running shorts, then I’d be very interested,” said TP, while LN is waiting for the next version of Google’s Pixel Fold: “I really like a lot of the features on Pixels, so if I could get all those features plus have a foldable, I'd be willing to spend a fair amount.”

AG and his son both have Motorola Razr folding phones: “The cameras aren't the best, but the phones work great, and they fit in my pockets easily and don't bind if, say, I'm wearing jeans and take a high step up. Also, they have a non-slip coating on the outside making it easier to hold onto, so I don't need to get a case for it.”

However, AS’s experiences with two Samsung Galaxy Flips mean he will not get another smartphone of this type: “The first one fell with a case, and the screen started delaminating from the fold outwards. Verizon replaced it with a new one. So far so good…The phone feels very sensitive to dropping i.e. if you drop it, you will most likely do irreparable damage to the screen. At least, that has been my experience, and this is now my fear. So, I ended up with a sturdy case. This makes the phone thick and heavy.”

“To do anything, you have to unfold it, so what's the point of having it folded?” AS continued. “It's almost like the worst of both worlds: folded it is unpractically thick and functionally useless...and unfolded, it's just like any other phone.”

Thanks for the feedback! More news below.

David Meyer

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This story was originally featured on Fortune.com