The Competition and Markets Authority (CMA) has set out principles to ensure the responsible development and use of Fundamental Models (FMs).
FMs are versatile AI systems that have the potential to revolutionise a range of sectors, from information access to healthcare, and the CMA's report published today outlines a set of guidance aimed at ensuring consumer protection and promoting healthy competition within this fast-growing industry.
Known for its adaptability to diverse applications, the foundational model has been rapidly adopted by a variety of user platforms, including familiar names such as ChatGPT and Office 365 Copilot. These AI systems have the power to drive innovation and stimulate economic growth, and are expected to bring about transformational change across sectors and industries.
CMA CEO Sarah Cardell stressed the urgency of proactively intervening on AI.
“The speed at which AI is becoming a part of people and businesses' daily lives is dramatic. The technology has real potential to dramatically increase productivity and make everyday tasks easier for millions of people, but we cannot take this bright future for granted.
That is why we are proposing these new principles today and launching a broad engagement program to ensure that the development and use of foundational models evolves in ways that promote competition and protect consumers.
We hope our collaborative approach will help realize the full potential of this new technology, but we also stand ready to step in if necessary.”
According to research by Earlybird, the UK is home to the highest number of AI startups in Europe, and the CMA report highlights that there are huge benefits to be gained if the development and use of FMs is effectively managed.
These benefits include the emergence of better products and services, improved access to information, scientific and medical advances, and even lower prices for consumers. Moreover, a vibrant FM market can open the door for a wider range of companies to challenge incumbent market leaders and win the competition. This competition and innovation can in turn invigorate the entire economy, stimulating productivity gains and economic growth.
“The technology landscape is changing and changing,” said Claire Trachet, a technology industry expert and CEO of business advisory firm Trachet.
“With [UK-hosted] global AI Safety Summit These principles, which will be published shortly, will demonstrate to citizens and investors that the UK is committed to regulating AI safely. To continue this momentum, it is important that the UK strikes the balance between developing effective regulation without stifling the growth of innovation and investment.
Ensuring regulation is well designed and effective creates a stable, safe and trustworthy business environment that is attractive to domestic and international investors, helping to attract and retain investment to the UK.”
The CMA report also contains warnings. It highlights the risks that could arise if competition remains weak or developers ignore consumer protection regulations. Such negligence could expose individuals and businesses to a flood of misinformation and AI-enabled fraud. In the long term, a small number of powerful companies could use FM to strengthen their market power and offer substandard products and services at exorbitant prices.
While the scope of the CMA’s initial review focused primarily on competition and consumer protection concerns, it acknowledges that other important issues relevant to FM, such as copyright, intellectual property, online safety, data protection and security, also require further consideration.
Sridhar Iyengar, Managing Director, Zoho Europe, said:
“The safe development of AI is at the heart of UK policy and will continue to play a key role in the UK's ambitions to lead the global AI race. While there are public concerns about the trustworthiness of AI, we must work towards solutions without losing sight of the business benefits that AI can bring, such as improved predictions and data analysis.”
Collaboration between business, government, academia, and industry experts is essential to strike a balance between safe regulation and guidance that leads to the proactive development and use of innovative business AI tools.
AI will move forward with or without the UK, so it is best for us to lead the research and development to ensure it evolves safely.”
The draft guidance published by the CMA is intended to guide the continued development and use of FM to ensure that people, businesses and economies can maximise the benefits of innovation and growth. Taking inspiration from the evolution of other technology markets, these guidance aims to guide FM developers and adopters in the following key areas:
- Accountability: Developers and deployers are responsible for the output provided to consumers.
- access: Ensure continuous access to critical inputs without unnecessary restrictions.
- Diversity: We encourage a sustained diversity of business models, including both open and closed approaches.
- choice: It provides businesses with ample options to determine how to utilize FM effectively.
- Flexibility: It gives you the flexibility to switch and use multiple FMs as needed.
- fairness: Prohibits anti-competitive practices such as preferential treatment, tying and bundling.
- transparency: It provides consumers and businesses with information about the risks and limitations of FM-generated content, enabling them to make informed choices.
The CMA will be engaging extensively with a range of stakeholders, both in the UK and internationally, over the coming months to further develop these principles. This joint effort is intended to support the positive growth of the FM market and promote effective competition and consumer protection.
Gareth Mills, a partner at law firm Charles Russell Speechleys, said:
“The principles themselves are clearly intended to promote a dynamic sector with low entry requirements and where smaller businesses can compete effectively with more established companies, while at the same time mitigating the potential for AI technologies to have adverse effects on consumers.
The report itself notes that while the CMA has established some ground rules, there is still work to be done and feedback from stakeholders, both in the UK and internationally, will be required before any formal policy and regulatory positions can be clearly established.
As technology adoption advances, it will become clear to what extent there are conflicts between competitive objectives and government strategy.”
An update on the CMA’s progress and uptake of these principles will be published in early 2024, reflecting the authority’s commitment to shaping AI markets in a way that benefits people, businesses and the UK economy as a whole.
(Photo by JESHOOTS.COM on Unsplash)
reference: UK highlights AI potential for international development at UN
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