FTC Investigating ChatGPT Creator OpenAI over Consumer Protection Issues

The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)
The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)
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FTC Investigating ChatGPT Creator OpenAI over Consumer Protection Issues

The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)
The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)

The US Federal Trade Commission has launched an investigation into ChatGPT creator OpenAI and whether the artificial intelligence company violated consumer protection laws by scraping public data and publishing false information through its chatbot.

The agency sent OpenAI a 20-page letter requesting detailed information on its AI technology, products, customers, privacy safeguards and data security arrangements.

An FTC spokesperson had no comment on the investigation, which was first reported by The Washington Post on Thursday.

The FTC document the Post published told OpenAI that the agency was investigating whether it has “engaged in unfair or deceptive privacy or data security practices” or practices harming consumers.

OpenAI founder Sam Altman tweeted disappointment that the investigation was disclosed in a “leak,” noting that would “not help build trust,” but added that the company will work with the FTC.

“It’s super important to us that out technology is safe and pro-consumer, and we are confident we follow the law,” he wrote. “We protect user privacy and design our systems to learn about the world, not private individuals.”

OpenAI has faced scrutiny elsewhere. Italian regulators temporarily blocked ChatGPT over privacy concerns, and privacy watchdogs in France, Spain, Ireland and Canada also are paying closer attention, including some that have launched investigations after receiving complaints.

The FTC's move is a serious regulatory threat to the nascent but fast-growing AI industry, although it's not the only challenge facing these companies.

Comedian Sarah Silverman and two other authors have sued both OpenAI and Facebook parent Meta for copyright infringement, claiming that the companies' AI systems were illegally “trained” by exposing them to datasets containing illegal copies of their works.

On Thursday, OpenAI and The Associated Press announced a deal under which the AI company will license AP’s archive of news stories.

Altman has emerged as a global AI ambassador of sorts following his testimony before Congress in May and a subsequent worldwide tour, including to Europe, where officials are putting the final touches on the world's first comprehensive rules for AI.

The regulations will focus on risky uses such as predictive policing and social scoring and include provisions for generative AI to disclose any copyright material used to train its algorithms.

Altman himself has called for AI regulation, although he has tended to emphasize difficult-to-evaluate existential threats such as the possibility that superintelligent AI systems could one day turn against humanity.

Some argue that focusing on a far-off “science fiction trope” of superpowerful AI could make it harder to take action against already existing harms that require regulators to dig deep on data transparency, discriminatory behavior and potential for trickery and disinformation.

“It’s the fear of these systems and our lack of understanding of them that is making everyone have a collective freak-out,” Suresh Venkatasubramanian, a Brown University computer scientist and former assistant director for science and justice at the White House Office of Science and Technology Policy, told the AP in May. “This fear, which is very unfounded, is a distraction from all the concerns we’re dealing with right now.”

News of the FTC's OpenAI investigation broke just hours after a combative House Judiciary Committee hearing in which FTC Chair Lina Khan faced off against Republican lawmakers, who said she has been too aggressive in pursuing technology companies over allegations of wrongdoing.

Republicans said she has been harassing Twitter since its acquisition by Elon Musk, arbitrarily suing large tech companies and declining to recuse herself from certain cases. Khan pushed back, arguing that more regulation is necessary as the companies have grown and that tech conglomeration could hurt the economy and consumers.



Sony Says to Stop Releasing PlayStation Games on Discs

French PlayStation' collector Cyril, poses with a PlayStaion 1, at his home in Vraiville, on November 20, 2024. (AFP)
French PlayStation' collector Cyril, poses with a PlayStaion 1, at his home in Vraiville, on November 20, 2024. (AFP)
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Sony Says to Stop Releasing PlayStation Games on Discs

French PlayStation' collector Cyril, poses with a PlayStaion 1, at his home in Vraiville, on November 20, 2024. (AFP)
French PlayStation' collector Cyril, poses with a PlayStaion 1, at his home in Vraiville, on November 20, 2024. (AFP)

Sony said Wednesday that it would stop releasing new video games for the PlayStation on disc in January 2028 following a shift in consumer preferences.

"Following this date, new games will be available on PlayStation Store and at retailers in digital formats only," the company said on its official PlayStation blog.

Sony said the upcoming shift "has no impact on games that already released, or will be releasing, prior to January 2028 in disc format."

The announcement comes as the upcoming exclusively digital release of "Grand Theft Auto VI", which is predicted to become the biggest-selling cultural product of all time, has caused some consternation among gamers.

There was grumbling on social media that the lack of a physical disc would eliminate any second-hand market for the title.

"This is a natural direction for Sony Interactive Entertainment to adapt to consumer trends as the general preference for digital media significantly outpaces physical discs," the company said.

"We remain committed to delivering a world-class gaming experience to our fans," it added.


Fear and Anger Brew Inside Meta amid AI Frenzy

The word "Hack" is seen in this aerial view of Meta's corporate headquarter offices in Menlo Park, California. JOSH EDELSON / AFP
The word "Hack" is seen in this aerial view of Meta's corporate headquarter offices in Menlo Park, California. JOSH EDELSON / AFP
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Fear and Anger Brew Inside Meta amid AI Frenzy

The word "Hack" is seen in this aerial view of Meta's corporate headquarter offices in Menlo Park, California. JOSH EDELSON / AFP
The word "Hack" is seen in this aerial view of Meta's corporate headquarter offices in Menlo Park, California. JOSH EDELSON / AFP

A frenzied push for artificial intelligence dominance comes with a different kind of cost for Meta, where massive layoffs, employee surveillance and departures have fueled reports of a heated internal climate.

As Meta spends billions annually to build out its AI capabilities, employees at Facebook, Instagram and WhatsApp are increasingly unhappy with their Mark Zuckerberg-led parent company, AFP reported.

Meta employees have weathered frequent layoffs since early 2025, including this spring when the company cut 10 percent of its workforce -- some 8,000 jobs -- and reshuffled another 7,000 employees.

For those who remain, an internal AI training initiative has drawn accusations of surveillance.

The company also underwent a major reorganization of its AI research division, into which Zuckerberg, Meta's founder and chief executive, has poured billions of dollars.

The malaise stands in stark contrast to Meta's robust finances -- driven by advertising, which makes up nearly 98 percent of its revenue. In the first three months of 2026, Meta's net income rose to more than $26 billion.

However, the bill for its AI investments is also exploding, prompting Zuckerberg, who has near-absolute power over the company, to impose sweeping cuts and increased monitoring of employees in the name of efficiency and savings.

The cuts are funding a massive race for infrastructure: Meta plans to spend up to $145 billion on AI investments this year, nearly twice last year's figure.

Harvesting data

After thousands of employees were reassigned to Meta's AI division, some, speaking anonymously to US media, have complained of "mind-numbing" tasks designed to train machines, or even automate away their own jobs.

That controversial program, called the Model Capability Initiative, was rolled out in April and suspended on June 22. It captured clicks, keystrokes and browsing activity of US employees to train AI agents -- software capable of independently performing tasks.

Zuckerberg, who has made AI the company's North Star, defended the program during an internal meeting: "AI models learn by watching really smart people do things," he said, according to Wired.

But the tool sparked a revolt. More than 1,600 employees signed a petition calling for it to end, with some likening the company to a "data extraction factory," according to media reports.

The pause came after private conversations, and performance data inadvertently became accessible to all staff. The system risked drawing the attention of European regulators, since it captured exchanges between employees on both continents.

In a statement to AFP Tuesday, a Meta spokesperson said the program was designed with privacy safeguards.

"While we have no indication at this time that any data was improperly accessed by Meta employees, we're pausing it while we investigate," the statement said.

One employee summed up the mood with a meme from "The Office," posted on an internal company forum, reading: "0 days since our last nonsense."

'Dead end quest'

All of these efforts aim to make up for a persistent lag behind Google, OpenAI and Anthropic, which dominate the race for cutting-edge AI models. Meta's own models, repeatedly delayed, have proved disappointing even internally.

To regain ground, Zuckerberg invested over $14 billion last year into Scale AI, a San Francisco-based startup, and poached its CEO Alexandr Wang -- who was 28 years old at the time -- to run a "superintelligence" lab inside Meta.

The expensive bet has yet to win people over. Several key figures have since walked out, among them Yann LeCun, considered one of the "godfathers" of modern AI, who had led Meta's AI research since 2013.

LeCun suddenly found himself reporting to Wang, more than 35 years his junior. He left Meta at the end of 2025 to launch his own startup.

In an interview with the Financial Times, the Turing Award winner lamented that, although "he learns fast," Wang has "no experience with research" and was on "a dead end" quest.

The stakes for Meta go beyond its social networks now. The company is also doubling down on consumer electronics with smart glasses and is considering a new prediction-market app called Arena, potentially in partnership with Polymarket and Kalshi, according to The New York Times.

Lawsuits also threaten to consume time and resources.

For the first time, a Los Angeles jury in March found Meta liable for the effects of social media addiction, just one day after a separate ruling in New Mexico said Meta had failed to protect minors.

Meta has appealed, but more lawsuits are expected this year.


South Korean Trade Watchdog Alleges Google Abused Its Position in Android App Store

A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)
A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)
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South Korean Trade Watchdog Alleges Google Abused Its Position in Android App Store

A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)
A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)

South Korea's antitrust regulator alleged on Wednesday that Alphabet's Google abused its dominant position in the Android app marketplace to hinder competition and will recommend corrective measures and a financial penalty.

The Korea Fair Trade Commission's (KFTC) Market Surveillance Bureau found Google's alleged abuse of market dominance in the Android app marketplace affected 14.16 trillion won ($9.1 billion) in revenue, the bureau said in a media briefing where it released its examiner's report on the matter.

From July ‌2019 to March ‌2026, Google's Games/Google Velocity Program, which it ‌internally ⁠called "Project Hug", offered domestic ⁠and overseas game developers financial support for using Google services such as Cloud, Ads and YouTube, provided that they launched games on Google's app store on terms at least as favorable as rival app marketplaces, the report said.

The contracts were also structured so that Google's financial ⁠support increased progressively as developers generated more ‌revenue through Google Play, creating ‌stronger incentives to prioritize Google's marketplace.

The program significantly reduced developers' ‌incentives to distribute games through competing app stores, including South ‌Korea's OneStore, blocking rivals' business activities and forcing developers into de facto exclusive dealing with Google, according to the report.

"Google Play competes fairly with other app stores and delivers numerous benefits ‌to developers and consumers in Korea.

"We have cooperated diligently with the KFTC's investigation, and ⁠we will ⁠continue to show the Commissioners that there has been no violation of the law,” Google said in a statement to Reuters.

If the commission ultimately concludes that Google abused its market dominance, it may impose a fine of up to 6% of the relevant affected revenue of $9.1 billion.

Google has eight weeks from receiving the examiner's report to submit a written response and review the evidence.

The bureau said it plans to convene the full commission and issue a final ruling promptly once Google's due process rights have been fully observed.