What Is the Relevant Product Market in AI?
Abstract
AI has taken the world by storm, and competition law is no exception. Policymakers, academics, and commentators are struggling to make sense of how to apply competition law principles to burgeoning AI markets. The question is spurred by an impending sense that inaction is likely to lead to monopolistic outcomes that will later be impossible to revert. What is feared is that AI will become dominated by a few large technology companies and, more spuriously, that these will be the same companies that already control vast swathes of the so-called digital sphere. In other words: it will make big tech even bigger.
One difficulty with this narrative, however, is that, strictly speaking, there is no such thing as an “AI market”because AI is not a unitary, monolithic technology. In this chapter, we argue that the first step to ensuring that antitrust law stays relevant in the age of AI is developing a principled approach to defining AI relevant markets; one that is legally, economically, and technologically sound. Relevant market definition is central to antitrust law because it is the starting point of most, if not all antitrust law cases.A relevant product market is typically comprised of all those products which consumers view as substitutable and which can therefore be said to compete against each other. By delineating the boundaries of competition between firms, relevant product market definition alerts of the presence of market power and, by extension, of the likelihood of anticompetitive effects.Despite its limitations and despite not being an end in itself, relevant product market definition is, and likely will remain, the main tool for thinking about the contours of competition between firms for the foreseeable future.
We suggest how this can be done by grasping the internal heterogeneity of AI and by understanding what makes AI similar to HI and HI-powered tasks, thus eschewing simplistic narratives about AI’s supposed ubiquity and uniqueness that are bound to impede antitrust law from discharging its social role, which is to protect competition for the ultimate benefit of consumers.