The Competition and Markets Authority (CMA) has outlined a set of principals aimed at protecting consumers and encouraging healthy competition following a review of foundation models (FMs).

FMs are artificial intelligence (AI) systems which can be adapted to a range of specific purposes and include popular application such as the large language model Chat GPT.

The CMA said that FMs could provide benefits including economic growth, lower prices for consumers and easier access to information.

However, the report also warned that consumers could be harmed due to AI-enabled fraud or if businesses failed to adhere to consumer protection laws. The CMA added that in the long term a small number of firms could use FMs to gain positions of market power and fail to offer the best products at the right prices.

The set of seven principles the CMA set out to mitigate this include transparency, accountability and choice. The CMA said in the coming months that it would work on these principles with the necessary stake holders to develop them further.

Sarah Cardell, chief executive of the CMA, said: “The speed at which AI is becoming part of everyday life for people and businesses is dramatic. There is real potential for this technology to turbo charge productivity and make millions of everyday tasks easier – but we can’t take a positive future for granted. There remains a real risk that the use of AI develops in a way that undermines consumer trust or is dominated by a few players who exert market power that prevents the full benefits being felt across the economy.”

Cardell added that the CMA’s role is "to help shape these markets in ways that foster strong competition and effective consumer protection, delivering the best outcomes for people and businesses across the UK."

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