The United States Federal Trade Commission (FTC) submitted a comment to the Copyright Office after conducting its own AI study last August. Although the FTC has no jurisdiction over copyright matters, it does have jurisdiction over consumer and competition violations and can indeed investigate and penalize companies for such violations independent of parallel copyright lawsuits, and in spite of standard indemnification clauses, misleadingly and inaccurately called “copyright shields” by OpenAI for example. There is no such thing as a copyright shield in this world. The FTC is right to point out that promoting such pseudo legal notions as a “copyright shield” is in itself a deceptive practice.
The U.S. Copyright Office has already said that creations made with generative artificial intelligence are ineligible for copyright because they don’t primarily come from a human hand. Nevertheless, Time Magazine keeps citing AI influencers who push the idea that asking for consent is unworkable and the best alternative are opt-out schemes, stances I personally find reprehensible under all current legal frameworks. Creators should refuse to settle for opt-out schemes and the lawsuits should keep coming. I agree with the FTC.
As much as I enjoy listening to Frank Sinatra and Aretha Franklin belt out modern rap lyrics on the popular There I Ruined It TikTok Channel I am uncomfortable when the same thing happens to living breathing human beings like Taylor Swift for example whose vocals have been ripped off on same channel. If a performer is alive, there are different provisions under privacy statutes (in Canada also copyright law) against their voice being used by AI without their consent. Also, I believe that music labels should be barred from cloning and exploiting artists vocals, which is why I’m cool with Sinatra’s AI peformances by anyone else than a label as a form of fair use. Consent should come directly from performers or be deemed prima facie invalid for copyright and a liability as an unfair competition and deceptive practice. As of now, I am not seeing enough lawsuits for this.
The FTC was instantly attacked by “critics” with pseudo-legal arguments like Chamber of Progress CEO Adam Kovacevich who contends that if something is fair use it cannot constitute a deceptive practice or unfair competition because “fair use is the original anti-monopoly policy. Copyright is a monopoly right… The whole range of startups who have the potential to disrupt those incumbents are not going to have the ability to pay and that’s what the principle of fair use protects here. So I think that the FTC really hasn’t thought about how fair use is anti-monopoly policy.” This is heavily misguided and downright ludicrous. I am surprised to hear such nonsense from a CEO.
Again, copyright statutes are distinct from trade practice statutes under the purview of the FTC. You could exerce a monopoly or run a deceptive practice without touching on copyright, or concurrently. A vast number of AI startups on government subsidies at the moment are over-inflating their promises while delivering basic software programs from the 1990’s disguised as AI. I won’t name names here but the “useful” applications of AI have been a major disappointment across the board. Consumers are being egregiously lied to and their time is being wasted. Companies are being lied to and charged for underwhelming products touted as the top in innovation. I find it totally deceptive and even a fraud. So, it is entirely possible to violate several statutes even if you don’t violate one particular statute on technical grounds.
Finally, I think it is important to remind everyone that the fair use regime is not supposed to make you rich. Only in very limited circumstances will fair use be recognized for commercial use and only in the US. In Canada, if you intend to make one cent from your AI, fair use is not on the table. In general, if you intend to make money with someone’s property you better ask for consent. I don’t understand the CEO logic at all. The FTC is not overstepping its authority.