FTC's Role in the Evolving AI Industry: A Discussion with Former Commissioner Alvaro Bedoya

FTC's Action on Pharmacy Benefit Managers

• 💡 The FTC has a history of combating anti-competitive practices, notably in the pharmaceutical industry with cases like 'pay for delay' and misuse of the Orange Book.
• ⚠️ A recent FTC administrative adjudication against three large Pharmacy Benefit Managers (PBMs) concerning insulin prices was stayed indefinitely, delaying a resolution for at least 105 days.
• 🎯 This delay occurred because two commissioners were recused, leaving no judges to preside over the case after the FTC's General Council stayed the adjudication.

Algorithmic Pricing and Antitrust Concerns

• 📈 The FTC is investigating the deployment of computer-generated or algorithmic pricing, which can be used to violate antitrust laws.
• 🤝 Instead of direct collusion, competitors may use identical algorithmic pricing software, leading to price-fixing allegations, as seen in the DOJ's RealPage lawsuit.
• 🔍 The FTC issued an internal report on algorithmic pricing in January and continues to track this issue closely.

FTC's Role in Evolving Industries

• 🚀 The FTC's involvement in rapidly changing industries, like AI, is crucial for market evolution and preventing incumbents from locking out startups.
• 💡 A key example is the FTC's successful lawsuit that blocked the proposed Nvidia-Arm merger, allowing the market to continue developing.
• 📈 Post-merger blockage, Arm's valuation increased significantly, demonstrating the market's potential when competition is preserved.

AI's Impact on the American Workforce

• 🤖 The increasing use of AI and algorithms raises concerns about worker displacement and the need for workplace protections.
• ⚠️ There is a growing need to protect workers from being replaced by algorithms, a trend already visible in sectors like call centers and online therapy.
• 🧠 The discussion highlights the potential perils of AI alongside its enormous potential, emphasizing the need for careful consideration of its societal impacts.