Comments by the Business at OECD (BIAC) Competition Committee to the OECD Competition Committee

The rapid growth of Generative AI (GenAI) tools and the development and successful deployment of AI foundation models (FMs) in the past few years raise legitimate and important questions about competition policy and enforcement in this field, the scope, need and timing for intervention by competition authorities, and any appropriate regulatory tools. [...] A meaningful discussion of these topics requires a thorough understanding of the structure and successive layers of the value chain of the GenAI industry, the business models that are being deployed, the nature of competition and the critical inputs that are required to compete in the various segments of the GenAI value chain and how the deployment of GenAI FMs and services interacts with competit. [...] BIAC compliments the competition authorities, in particular the CMA, that have not only mapped many relevant developments in relation to the development and distribution of FMs but have also identified a number of uncertainties with regard to the evolution of the markets for FMs and the potential impact of FMs on downstream and other markets. [...] BIAC is of the view that, notwithstanding the challenges presented by the exceptionally innovative and fast-growing nature of the Gen AI space, there remains a requirement to adhere to rigorous evidence- based fact-finding and establishment of counterfactuals necessary to establish specific harm in the specific context of Gen AI services. [...] The relevant markets, the sources and indicators of market power, the theories and effects of harm, and the counterfactuals and efficiencies must be defined and analyzed on a case-by-case basis, taking into account the specific features and dynamics of the GenAI sector.