Federal Commerce Fee (FTC) Chair Lina Khan has raised issues in regards to the potential misuse of AI by airways to cost greater costs for passengers attending funerals.
What Occurred: Talking on the 2024 Quick Firm Innovation Pageant, Khan highlighted the dangers AI poses in enabling fraud and worth discrimination. She emphasised that AI instruments are accelerating scams and permitting customized pricing based mostly on shopper information, Enterprise Insider reported on Wednesday.
Khan defined that AI is already automating conventional on-line scams like phishing and introducing new frauds equivalent to voice cloning. She additionally warned about retailers utilizing AI-driven surveillance expertise to regulate costs for particular consumers.
The FTC is investigating AI’s position in worth discrimination, which differs from dynamic pricing which adjusts costs based mostly on market situations. Khan famous that AI might result in diversified costs based mostly on private information collected by digital firms.
She offered examples, equivalent to individuals with nut allergic reactions being charged extra for granola bars or eating places utilizing QR codes for customized menus.
“Or anyone being charged extra for an airplane ticket as a result of the corporate is aware of that they simply had a demise within the household and have to fly throughout the nation,” Khan mentioned.
In July, the FTC issued a market inquiry to eight firms to supply data on “surveillance pricing services” that use shopper information. Khan harassed the significance of analyzing this apply to find out its impression on shoppers.
Khan concluded by questioning whether or not society desires to simply accept such focused pricing or implement rules to forestall it. She additionally famous that dynamic pricing in areas like ride-sharing has made individuals extra accustomed to variable pricing.
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Why It Issues: The issues raised by Khan about AI-driven worth discrimination come amid broader scrutiny of tech firms’ information practices.
Final week, the FTC criticized main tech companies like Amazon.com Inc. and Meta Platforms Inc. for his or her intensive information assortment and monetization practices, which pose vital privateness dangers to shoppers.
Furthermore, in December CNBC’s “Mad Cash” host Jim Cramer criticized Khan’s insurance policies, arguing that her stance on mergers and acquisitions is negatively impacting investor returns. Cramer referred to her as a “one-woman wrecking crew” for inventory portfolios, highlighting the stress between regulatory oversight and market efficiency.
Moreover, in July 2023, Elon Musk accused Khan of bias and overreach within the FTC’s privateness investigation into Twitter (Now often known as X). Musk’s allegations underscore the contentious relationship between the FTC and tech giants, as they navigate the complicated panorama of information privateness and shopper safety.
In April, Apple Inc. was known as out by Jon Stewart for allegedly blocking an interview with Khan on his podcast. This incident highlights the continuing antitrust investigations into Apple’s enterprise practices and market dominance.
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