Monopoly: AI edition

1 August 2020 Security Services & Risk Management

Due to the inherent nature of artificial intelligence (AI), AI-powered industries naturally tend towards monopolisation. This is because once the software and algorithms have been developed, AI uses data to continue to learn and find solutions to problems without (or with minimal) human intervention, and it does so with increased accuracy and efficacy compared to humans. This makes it more difficult for competitors to catch up.

When the first company completes the development of its AI and starts to sell it worldwide before its competitors do, the clock starts ticking and the lapse of time before the next AI emerges on the market determines the competitive scene.

While major technology companies are already using AI technology, its application in traditional industries, such as the healthcare and automotive sectors, is just beginning. For example, in the healthcare industry, AI can already be used to diagnose patients via photographs and can predict whether a patient is at an increased risk for suicide purely from the application of standardised tests. However, more research and development is needed before hospitals and clinics begin using this technology on their patients en masse.

The application of AI in traditional industries such as the healthcare and automotive sectors requires regulation in terms of competition and antitrust law. There is scope for antitrust regulators to step in and regulate economies that contribute to global competition, without stifling innovation and wealth creation. How they will effectively achieve this, however, is still unclear.

Abuse of dominance laws

Abuse of dominance laws could potentially protect consumers from harmful monopolies. In South Africa. Such laws prevent companies that have market power of 35% or more from charging excessive prices, refusing access to competitors and customers to essential facilities or scarce products and generally engaging in ‘exclusionary’ acts. The South African Competition Commission has already spent time and resources in understanding digital markets in this respect.

Abuse of dominance laws may also help in closing the data gap in the development of AI. By making the data used by the first AI in a particular market available to subsequent AIs in that same market, when new AIs enter a market, they would theoretically already be on the same level as the original AI. In other words, all AI services in the same industry will enter the market, already having the same knowledge as the other AIs available for sale. In the context of the healthcare industry, allowing access to the data analysed from the patients that the first AI has diagnosed would place subsequent similar AIs on the same level playing field.

However, the option of data sharing does come with its own problems, as the privacy of consumers must also be considered when allowing competitors to access consumer data. For AI to succeed, consumers would need to trust that the data collected via the use of a particular service will not be shared or traced back to them.

Ensuring competition

Recent amendments to the Competition Act 89 of 1998 in South Africa could signal a further starting point in regulating AI. Since the amendments, companies accused of charging excessive prices bear the burden of proving that the prices charged for goods or services are reasonable. Consumers who make use of AI services will thus be protected, as the price charged for services using AI will need to be reasonable, as with every other service. However, this could have the unintended consequence of making it difficult for competitors to enter the market as, if the best (or only) AI in a specific industry is priced reasonably, this is most likely the AI that consumers will use, and there may not be a reason or need for any other AI services in that market.

The list of problems and potential solutions are clearly numerous and varied, however, we will not have all the answers until AI is well established in everyday life and becomes increasingly regulated as a result. Even then, amendments to existing antitrust legislation will need to be made quickly and carefully to ensure that AI services can succeed in a competitive economy, without destroying competitive dynamics.




Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

Meeting compliance obligations
Issue 7 2020 , Security Services & Risk Management
Helping businesses in SA understand and meet their compliance obligations to local regulations.

Read more...
Industrialisation or imperialism?
Issue 7 2020 , Security Services & Risk Management
4IR has to be a matter of national agenda; national economic and political sovereignty and national security - necessitating commensurate prioritisation.

Read more...
Password vulnerabilities in South Africa
Issue 7 2020, Kaspersky , Security Services & Risk Management
Research from Kaspersky has shown that people are putting their online safety at risk by making bad password decisions and simple password mistakes that may have far-reaching consequences.

Read more...
The greatest crime-fighting weapon is predictably
Issue 7 2020 , Security Services & Risk Management
Predictability fuelled by artificial intelligence (AI) and big data has the ability to reduce violent crimes by 25% by 2023 according to Aura.

Read more...
PCI DSS can be your PoPIA security blueprint
Issue 6 2020, Galix Group , Security Services & Risk Management
Some of the requirements of PCI DSS can also be used to comply with PoPIA, South Africa’s data privacy law.

Read more...
eVisa solutions for Botswana
Issue 6 2020 , Security Services & Risk Management
Travelers to Botswana will soon be able to complete visa applications online and ease their entry into the country.

Read more...
Three steps to kick-start POPIA compliance
Issue 6 2020 , Security Services & Risk Management
Complying with data privacy, security laws and regulations can be a daunting task for any organisation.

Read more...
Digital evidence handling in the cloud
Issue 5 2020 , Security Services & Risk Management
Investigate Xpress is a free, cloud-based digital evidence management solution designed to make police forces more efficient and productive.

Read more...
The evolution of security in residential estates
Residential Estate Security Handbook 2020 , Editor's Choice, Integrated Solutions, Security Services & Risk Management
Two large estates discuss their security processes and the ever-expanding scope of responsibilities they need to fulfil.

Read more...
Bang for your security buck(s)
Residential Estate Security Handbook 2020, Alwinco , Editor's Choice, Security Services & Risk Management
Hi-Tech Security Solutions asks how estates can maintain a good security posture in the time of the ever-shrinking budget.

Read more...