FTC Warns Tech Companies to Keep AI Claims in Check

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The Federal Trade Commission (FTC) issued a warning to tech companies on Feb. 27, telling them to “keep your AI claims in check,” as the agency intends to crack down on overstated artificial intelligence (AI) claims.

Michael Atleson, an attorney for the FTC division of advertising practices, wrote in a blog post that the term “artificial intelligence” is ambiguous. It is also a “hot marketing” term that advertisers won’t be able to resist from “overusing and abusing.”

“We’ve already warned businesses to avoid using automated tools that have biased or discriminatory impacts. But the fact is that some products with AI claims might not even work as advertised in the first place,” Atleson cautioned.

The U.S. consumer protection agency urge companies to not exaggerate claims about what their AI can do.

“Your performance claims would be deceptive if they lack scientific support or if they apply only to certain types of users or under certain conditions,” the agency said.

The commission also warn companies to be aware of the risk they take by making AI products available to consumers.

“If something goes wrong—maybe it fails or yields biased results—you can’t just blame a third-party developer of the technology,” the FTC said. “And you can’t say you’re not responsible because that technology is a ‘black box’ you can’t understand or didn’t know how to test.”

Other guidelines include exhibiting proof that an AI product can do something better than a non-AI product, as well as actually using artificial intelligence in AI products. Claiming AI can do something beyond its current capacity would be deceptive.

“Marketers should know that—for FTC enforcement purposes—false or unsubstantiated claims about a product’s efficacy are our bread and butter,” the regular said. “You don’t need a machine to predict what the FTC might do when those claims are unsupported.”

The agency has issued AI-related guidance previously, cautioning that it is important for companies to keep their practices grounded in established FTC consumer protection principles. This includes using AI truthfully, fairly, and equitably.

Sam Altman, the CEO of ChatGPT, creator OpenAI, stated in a series of tweets on Feb. 18 that it was “critical” for AI to be regulated in the future, until it can be better understood. He stated that he believes that society needs time to adapt to “something so big” as AI.

Bryan Jung contributed to this report.

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