AI Enforcement: What’s the FTC Been Up To?

This WilmerHale blog reviews AI and privacy litigation trends over the past year. Here’s an excerpt addressing the enforcement activities of one of the more active federal players, the Federal Trade Commission:

At the federal level, the Federal Trade Commission (FTC) continued to leverage its authority over consumer-protection matters to scrutinize companies developing or deploying AI tools, with a focus on allegedly deceptive or unsubstantiated marketing claims. Late in the Biden administration, the FTC launched “Operation AI Comply,” an enforcement initiative aimed at curbing false or misleading representations about AI capabilities and outcomes.

Although that effort largely carried forward in the second Trump administration, last year the agency signaled some willingness to revisit certain prior decisions in light of evolving executive‑branch priorities around minimizing regulation in the AI sector, finding in at least one case that a prior consent order “unduly burden[ed] innovation in the nascent AI industry.”

The FTC brought several Section 5 unfair or deceptive conduct actions against companies accused of overstating the capabilities or benefits of their AI products, seeking injunctions, monetary relief, and—in at least one case—a permanent ban on offering AI‑related services. In parallel, the agency distributed more than $15 million in connection with allegations that a developer using AI tools stored, used, and sold consumer information without their knowledge.  This action underscored the connection between traditional privacy theories and consumer‑protection enforcement against developers harnessing AI.

The blog also notes that the FTC has also relied on its authority under Section 6 of the FTC Act to investigate the practices of tech companies offering AI‑powered chatbots.  The FTC has sought detailed information from these companies about “data‑collection practices, model training, retention policies, and safeguards designed to protect minors, with particular attention to compliance with the Children’s Online Privacy Protection Act.”