FTC Proposes New Policy on AI Accuracy: Hiding How an AI System is Steered May Violate Federal Law
FTC Proposes New Policy on AI Accuracy: Hiding How an AI System is Steered May Violate Federal Law
Publish Date: 2026-07-08 16:04:00
Source Domain: www.spencerfane.com
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FTC Proposal on Deceptive AI Practices: The Federal Trade Commission (FTC) has proposed a policy statement indicating that AI companies steering their systems to serve goals other than user expectations can be deceptive under federal law.
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Non-Defense Mechanism: Even compliance with state laws aimed at preventing discrimination, under the FTC’s stance, won’t absolve companies of deceptive practices if it changes AI output without users’ knowledge.
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Prominent Disclosure Requirement: To avoid violating the FTC Act, companies must conspicuously disclose any deviations from expected AI outputs. Sneaky disclosures in terms of service will not suffice.
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Focus on Deception Rather than Unfairness: The FTC’s core idea hinges on deceptive misrepresentations rather than mere unfairness.
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Comment Period: Public comments on this proposal are due by July 31, 2026, allowing businesses and consumers to voice their opinions.
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Impact on State Laws: The FTC’s stance conflicts with certain state AI laws, particularly Colorado’s revised AI Act, setting up potential litigation over the preemption of state laws by federal regulations.
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Guidance for AI Companies: Companies using AI systems must review their marketing claims about AI accuracy and objectivity to ensure they align with their actual practices.
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Compliance Strategy: AI-using companies need to carefully consider how to manage potential conflicts between state AI laws and federal regulations, possibly through transparent disclosure and careful documentation.
