Bruin AI Current Events
Microsoft Faces FTC Scrutiny | Canadian Publishers Challenge OpenAI
Good morning Bruin Bots 🤖
Welcome to another week of the Current Events newsletter!
This week, we’re diving into two intriguing developments. First, we’ll explore the Federal Trade Commission’s investigation into Microsoft, examining its potential implications. Then, we’ll look at the steps Canadian publishers are taking to sue OpenAI and what these actions could mean for the future of Big Tech.
Rundown for today👇
💸 Economy
🧭 Ethics
-Karen
FTC Launches Microsoft Investigation
This week, Microsoft received hundreds of pages of requests for information from the Federal Trade Commission (FTC) in order to investigate possible anticompetitive actions. The request is exhaustive, demanding information on nearly all aspects of Microsoft’s business ranging from cyber security to AI and cloud computing.
Despite a wave of antitrust action in recent years, Microsoft has managed to avoid scrutiny. Even when regulatory objections to some of Microsoft’s actions existed, such as when it acquired gaming company Activision last year, the firm went about its business without much difficulty.
Recently, however, a flawed update from cybersecurity firm CrowdStrike caused computers running Microsoft operating systems to crash, bringing unwanted attention from regulators. This instance was seen as indicative of a firm having far too much market power without adequate measures to safeguard the information traveling through its servers. In addition to the attention Microsoft received following the CrowdStrike incident, the company is being scrutinized for the manner in which it bundles its products, for example adding on Microsoft Teams when someone buys a more commonly demanded product such as Excel or Word. Companies such as Zoom have argued that this represents anticompetitive behavior as it makes it more difficult for Zoom to gain market share when a competitor’s software, such as Teams, is given to people as a part of their purchases of unrelated products. As such, some regulatory agencies such as those in the European Union have already taken a firm stance on these actions, stating that “Microsoft violated European Union antitrust rules with ‘possibly abusive’ practices.”
Although the action from the FTC is significant, the future direction of information requests such as these remains unclear at best due to the incoming Trump administration. Under Trump’s last administration, he did push significant antitrust actions such as the lawsuit against Meta; however, he has made it clear that the current FTC chair, Lina Kahn, who has spearheaded many of the recent investigations, is likely to be replaced.
We have seen unsuccessful antitrust suits against Microsoft in prior years such as the 2001 case against Microsoft for a similar strategy of bundling its operating system and browser. If successful, this case would have large implications for the big tech landscape as it would most likely separate Microsoft and its many subsidiaries. For now, however, the most uncertainty regarding the outcome of this investigation surrounds whether it will be continued under the incoming administration.
-Tobin
Canadian Publishers Sue OpenAI
The most recent suit against OpenAI has been brought by the Toronto Star, Metroland Media, Postmedia, The Globe and Mail, The Canadian Press, and the Canadian Broadcasting Corporation, extending the fight over copyright and artificial intelligence beyond the United States.
The Canadian news corporations allege that Open AI “illegally scraped their content and used it to train its AI tools,” similar to the suit launched by the New York Times. As opposed to the split responses from US-based news organizations, with some signing deals with OpenAI for licensing, this lawsuit represents the majority of Canadian news organizations who have agreed that the use of their work for AI training is harmful.
Similar to the sentiments from many US organizations, Canadian organizations are concerned about the unlicensed use of their work given the lack of compensation OpenAI has provided. Unfortunately, the use of AI to summarize websites has the potential to lower the readership these companies receive, possibly upending the business model of news corporations.
The total payout these plaintiffs may receive could amount to billions if they prove successful. The litigants, in this case, want “up to C$20,000 in damages for each article used by OpenAI, suggesting a victory in court could be worth billions.”
As it did in the United States, OpenAI is relying on a loose interpretation of “fair use,” under which a company is allowed “the unlicensed use of copyrighted material under certain circumstances.”
Canada has historically been less friendly to big tech than the US, for example, in 2023, Canada required Google and Meta to pay for news posted on their platforms, leading Meta to entirely block news from showing up on its apps in Canada. While progress seems to be slow in the United States, Canada’s history of being tough on Big Tech may lend itself favorably to the news organizations as they will be in front of a regulatory regime more likely to push against the sway of Big Tech, possibly changing the dynamic of international AI cooperation in the future.
-Tobin
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All the best,
Tobin Wilson, Editorial Intern
Karen Harrison, Newsletter Manager
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