Insights Regulators publish updates on strategic approaches to AI


The Government has published updates from ‘key sectoral and cross-economy regulators’ on the steps they are taking to develop their strategic approaches to AI in the light of the Government’s White Paper on AI Regulation (previously commented upon here). The regulators who have provided updates include the Bank of England, Equality and Human Rights Commission, Legal Services Board, Financial Conduct and Authority. Also included are updates from Ofcom (which takes the form of its Plan of Work for 2024/25, which we have commented upon here) and the Competition and Markets Authority (“CMA”) and Information Commissioner’s Office (“ICO”).

The update from the CMA follows its recent update paper on AI Foundation Models (which we commented upon here) and touches upon many of the same themes. While it recognises the benefits that AI can bring to business and consumers, the CMA expresses concern about the risk to competition and consumers. For example, AI systems may distort competition by giving undue prominence to choices that benefit the platform at the expense of options that may be better for consumers. Similarly, the small number of incumbent firms (and partnerships between them) could lead to the shaping of AI-related markets in ways which reduce fair competition. The CMA also warns that consumers’ relatively limited understanding of the workings of AI systems could leave them at risk of being exposed to false and misleading information (for example through so-called ‘hallucinations’) or being unable to detect if AI-enabled personalised pricing or offers constitute good value.

The CMA states that it will “continue to research impacts on competition and consumer protection in AI-related markets” and cites its work on the impact of AI on ‘choice architecture’ within digital markets as well as its programme of work on AI Foundation Models. Looking ahead, it intends to examine the conditions of competition in the provision of public cloud infrastructure services as part of its ongoing Cloud Market Investigation, continue to monitor emerging partnerships between leading Foundation Models developers, step up its use of merger control, and consider which digital activities to prioritise for investigation under new powers anticipated in the Digital Markets, Competition and Consumers Bill (making it clear that it is “ready to use these new powers to raise standards in the market”). It also intends to publish a range of documents, including: a paper on AI accelerator chips; research into consumers’ understanding and use of Foundation Model services; and a further update on Foundation Model-related work in the Autumn.

The update from the ICO also draws attention to the work that it is already doing to ensure that the development and deployment of AI is done in a way that mitigates risks from a data protection perspective, explaining that many of the principles within the GDPR echo those outlined in the Government White Paper. It points to work such as the AI and Data Protection Toolkit, the Children’s Code, and a suite of guidance designed to help organisations apply data protection law to AI. As for upcoming projects, in addition to continuing its consultation series on generative AI, it will publish a consultation on biometric classification technologies shortly, and consult next year on updates to its Guidance on AI and Data Protection and Automated Decision Making and Profiling.

The updates from the CMA and ICO can be read here and here. The complete list of updates from regulators can be found here.