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USA: FTC publishes blog post regarding use of AI

On June 11, 2024, the Federal Trade Commission (FTC) published a blog post regarding ethical uses for artificial intelligence (AI) in business. The blog post highlights several tips and references to past decisions as a guide.

Do not misrepresent service capabilities

The FTC highlighted that it has warned companies against making false claims about the use of AI or algorithms and highlighted recent enforcement decisions that emphasize this point.

Do not offer services without adequately mitigating risks of harmful output

The use of bots and avatars contains risks regarding manipulating people to make harmful choices, even if not done purposefully. The FTC urged businesses to consider the increase of these risks for products offered to children and warned companies to assess risks of reasonably foreseeable harm before and after the deployment of tools.

Do not insert ads into a chat interface without clarifying if there is paid content

As the presence of advertising increases, a generative AI output should clearly state when content is paid or organic. The FTC also highlighted past decisions regarding blurred digital advertising targeted to children and specifically advises marketers to steer away from this practice completely.

Do not use consumer relationships with avatars and bots for commercial manipulation

The FTC mentioned that a service that offers services mimicking human relationships should not use those relationships to manipulate users into buying additional services or promoting affiliated businesses. Similar to the FTC's rulemaking proposal to make it easier for subscriptions to be canceled, a bot should not beg or entice a consumer not to cancel.

Do not violate consumer privacy rights

Lastly, the FTC acknowledged that avatars and bots can collect a large amount of personal information. Therefore, companies should be honest about the collection and use of personal information and are warned against secretly changing privacy policies or terms of service. The FTC highlighted that it will hold companies accountable for how they obtain, retain, and use customer data.

You can read the blog post here.