Artificial Intelligence – Competition law in the virtual worlds and generative artificial intelligence: the approach of the European Union
Article by: Constantinos Michael, Director – Legal Services , Baker Tilly South East Europe
Enterprises in a variety of sectors are increasingly incorporating Artificial Intelligence (AI) into critical parts and processes of their businesses, and for quite some good reason, as AI carries the potential to provide numerous and substantial benefits: It can help businesses identify and improve operational efficiencies, reduction of costs, streamlining job processes, improving customer value and experience, optimize business strategy, and increasing profitability.
However, widespread adoption of AI also has the potential to create substantial antitrust risks for businesses.
The European Union (EU) has been actively shaping its regulatory landscape to address the challenges posed by artificial intelligence. The aim is to set clear rules for AI applications, fostering trust while minimizing risks. It seeks to outline criteria for high-risk AI systems, ensuring transparency, accountability, and human oversight. This regulatory approach is crucial in preventing monopolistic practices and promoting fair competition by establishing a level playing field for businesses utilizing AI technologies. In addition, the European Commission is looking into some of the agreements that have been concluded between large digital market players and generative AI developers and providers. The European Commission is investigating the impact of these partnerships on market dynamics.
Market Dominance Concerns: As AI continues to advance, concerns regarding market dominance and potential abuse of power by tech giants have emerged. The EU’s competition policies are adapting to address these issues, scrutinizing whether certain AI practices lead to anti-competitive behaviour. Evaluating market dominance and preventing monopolies is pivotal to ensure fair competition, protect consumers, and encourage a diverse AI ecosystem. Striking a balance between nurturing innovation and preventing monopolistic practices is a delicate challenge that the EU antitrust authorities must navigate.
Innovation vs. Anti-Competitive Behavior: Balancing innovation with the prevention of anti-competitive behaviour is at the core of the EU’s approach to AI. While fostering a competitive environment that stimulates innovation is crucial, safeguards are necessary to prevent the misuse of market power. Antitrust measures aim to curb practices that stifle competition and hinder smaller players from entering the market. The challenge lies in fostering an AI landscape where companies can innovate and compete without engaging in unfair practices that could hinder overall market dynamics.
In summary, the EU’s concerns about market dominance, and the delicate balance between innovation and preventing anti-competitive behavior are pivotal aspects in shaping the landscape of AI in the European Union.