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The Federal Trade Commission is cracking down on companies making big claims about AI.<\/p>\n
On Wednesday, the FTC announced cases against four businesses the commission claims made \u201callegedly deceptive claims about AI-driven services\u201d to market and sell their businesses. In addition, the FTC announced a settlement with another company that allowed users to create fake customer reviews using GenAI tools.<\/p>\n
The batch of cases, part of an enforcement strategy dubbed Operation AI Comply\u2014which is totally not a cheesy Steven Seagal flick\u2014involves three companies that the FTC alleges promised profitable digital storefronts that never materialized. <\/strong>The commission also settled a case with the company DoNotPay, which offered legal services but, according to an FTC complaint, \u201cdid not conduct testing to determine whether its AI chatbot\u2019s output was equal to the level of a human lawyer\u201d and didn\u2019t hire or retain attorneys.<\/p>\n\u201cSome marketers can\u2019t resist taking advantage of that by using the language of AI and technology to try to make it seem like their products or services deliver all the answers,\u201d Julia Solomon Ensor, an attorney in the enforcement division of the FTC\u2019s Bureau of Consumer Protection, wrote in a blog post announcing the cases.<\/p>\n
The FTC also announced that AI writing company Rytr agreed to a proposed settlement over claims it sold a tool that it said could write and publish fake customer reviews for businesses. The proposed order \u201cwould bar the company from advertising, promoting, marketing, or selling any service dedicated to\u2014or promoted as\u2014generating consumer reviews or testimonials\u201d in the future, according to a press release announcing the cases.<\/p>\n
Long time coming? <\/strong>The FTC has been raising the alarm about AI-related business claims as interest in the tools have surged. <\/strong>Last year, FTC attorney Michael Atleson wrote a blog post reminding businesses to keep their \u201cAI claims in check,\u201d and two months later, FTC Chair Lina Khan told reporters that \u201cIf AI tools are being deployed to engage in unfair, deceptive practices or unfair methods of competition, the FTC will not hesitate to crack down.\u201d<\/p>\nThe Securities and Exchange Commission has also begun its own investigations into potentially false AI claims.<\/p>\n
\u201cUsing AI tools to trick, mislead, or defraud people is illegal,\u201d Khan said in the press release. \u201cThe FTC\u2019s enforcement actions make clear that there is no AI exemption from the laws on the books. By cracking down on unfair or deceptive practices in these markets, FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.\u201d<\/p>\n<\/div>\n
Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Get marketing news you’ll actually want to read Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides. The Federal Trade Commission is cracking down on companies making big claims about AI. On Wednesday, the FTC announced cases […]<\/p>\n","protected":false},"author":1,"featured_media":21564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[78],"tags":[],"class_list":{"0":"post-21563","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-marketing"},"yoast_head":"\n
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