FTC

Late last month, the Federal Trade Center (“FTC”) announced that it reached a settlement with a company called Workado to resolve allegations that it made false or misleading representations about the efficacy of its “AI Content Detector” product in violation of Section 5 of the FTC Act.

According to the FTC’s complaint, Workado advertised its AI Content Detector as trained on a number of mediums, including blog posts, Wikipedia entries, and AI-generated text, when it fact it was trained only on academic abstracts and content generated by ChatGPT and was not adequately fine-tuned or tested.  The complaint alleges that, based on independent testing, the AI Content Detector is less accurate than Workado advertised and is accurate only around half the time when evaluating non-academic AI-generated content.Continue Reading AI Content Detection Company Settles FTC Allegations of Misrepresentations

This quarterly update highlights key legislative, regulatory, and litigation developments in the first quarter of 2025 related to artificial intelligence (“AI”), connected and automated vehicles (“CAVs”), and cryptocurrencies and blockchain. 

I. Artificial Intelligence

A. Federal Legislative Developments

In the first quarter, members of Congress introduced several AI bills addressing national security, including bills that would encourage the use of AI for border security and drug enforcement purposes.  Other AI legislative proposes focused on workforce skills, international investment in critical industries, U.S. AI supply chain resilience, and AI-enabled fraud.  Notably, members of Congress from both parties advanced legislation to regulate AI deepfakes and codify the National AI Research Resource, as discussed below.

  • CREATE AI Act:  In March, Reps. Jay Obernolte (R-CA) and Don Beyer (D-VA) re-introduced the Creating Resources for Every American To Experiment with Artificial Intelligence (“CREATE AI”) Act (H.R. 2385), following its introduction and near passage in the Senate last year.  The CREATE AI Act would codify the National AI Research Resource (“NAIRR”), with the goal of advancing AI development and innovation by offering AI computational resources, common datasets and repositories, educational tools and services, and AI testbeds to individuals, private entities, and federal agencies.  The CREATE AI Act builds on the work of the NAIRR Task Force, established by the National AI Initiative Act of 2020, which issued a final report in January 2023 recommending the establishment of NAIRR.

Continue Reading U.S. Tech Legislative & Regulatory Update – First Quarter 2025

On March 12, the U.S. Senate Committee on Commerce, Science, and Transportation advanced two nominations key to the Trump Administration’s technology policy: Mark Meador as a Commissioner for the Federal Trade Commission (“FTC”), and Michael Kratsios as Director of the White House Office of Science and Technology Policy (“OSTP”).  Both nominees previously had their nomination hearings in front of the Committee on February 25, described below.

Mark Meador

Meador started his career in the healthcare division of the FTC.  In his opening statement, he discussed the importance of the FTC in protecting consumers and free market competition. He specifically referenced the need to protect children in the digital environment and stated that the FTC should use its consumer protection powers to safeguard families.

During the nomination hearing, Meador faced questions about consumer protection enforcement mechanisms, “Big Tech” regulation, pharmacracy benefit managers (“PBMs”), antitrust concerns, and the agency’s direction under the new administration.Continue Reading Senate Commerce Committee Questions Trump Tech Nominees

Yesterday, the Trump Administration issued an Executive Order titled “Ensuring Accountability for All Agencies” (the EO).  The EO asserts Presidential authority over independent agencies, including the Federal Trade Commission (FTC), Federal Communications Commission (FCC), and Securities and Exchange Commission (SEC).  While the precise impacts remain to be seen, overall the EO will likely result in greater involvement by the White House in policymaking at independent agencies, both in substance and process.

OIRA Review of Agency Regulations.  The EO amends the Clinton Administration-era Executive Order 12866, which established a review process for regulations promulgated by executive branch departments and agencies but excluded independent agencies from that process.  The process includes requirements that departments and agencies submit “significant regulatory actions” to the Office of Information and Regulatory Affairs (OIRA) for review before publication in the Federal Register.  Executive Order 12866 defines “significant regulatory action” to mean “any regulatory action that is likely to result in a rule that may:”Continue Reading Trump Administration Asserts Presidential Authority Over Independent Agencies

On January 20, 2025, the Trump Administration released a memorandum, “Regulatory Freeze Pending Review,” to halt agency rulemaking processes (the “EO”).

The EO orders all executive departments and agencies to “not propose or issue any rule in any manner, including by sending a rule to the Office of the Federal Register (the ‘OFR’), until a…

Continue Reading Trump Administration Releases “Regulatory Freeze Pending Review” Executive Order

On January 3, 2025, the Federal Trade Commission (“FTC”) announced that it reached a settlement with accessiBe, a provider of AI-powered web accessibility software, to resolve allegations that the company violated Section 5 of the FTC Act concerning the marketing and stated efficacy of its software. Continue Reading AI Accessibility Software Provider Settles FTC Allegations

On Tuesday, November 26, the FTC released a proposed settlement order with Evolv Technologies, a provider of AI-enabled security screening systems.  The FTC’s complaint in the matter alleged that Evolv violated Section 5 of the FTC Act by making “false or unsupported claims” about the capabilities of an AI-enabled screening system that it provides to schools and other venues.  Specifically, the complaint asserts that Evolv misrepresented “the extent to which the system will detect weapons and ignore harmless items” more accurately and cost-effectively than traditional metal detectors. 

The FTC positioned its action against Evolv as a continuation of its work under the previously announced “Operation AI Comply,” which we discussed here, to “ensure that AI marketing is truthful.”  The complaint alleges that Evolv made “a very deliberate choice” to market its screening system as involving the use of AI, but that Evolv’s effort to position the screening system as a high-tech “weapons detection” system rather than a metal detector “is solely a marketing distinction, in that the only things that [the screening system’s] scanners detect are metallic, and its alarms can be set off by metallic objects that are not weapons.” Continue Reading FTC Settles Case Against Provider of AI-Enabled Security Systems

On December 3, 2024, the Federal Trade Commission (“FTC”) announced that it reached a settlement with IntelliVision Technologies Corp. (“IntelliVision”) to resolve allegations that the company violated Section 5 of the FTC Act by making certain claims concerning its AI-powered facial recognition software. 

The FTC’s complaint alleged, among other things, that IntelliVision made certain inaccurate or insufficiently supported claims about its facial recognition software, including with regard to its accuracy as it pertains to gender, race, and ethnicity detection and bias.

To resolve these and other allegations, the FTC and Intellivision entered into a proposed consent order that places restrictions and obligations on IntelliVision with respect to its facial recognition technology.

Among other restrictions, the proposed consent order requires that IntelliVision not make misrepresentations about the accuracy or efficacy of its technology, including concerning “the comparative performance … with respect to individuals of different genders, ethnicities, and skin tones, or reducing or eliminating differential performance based on such factors” and detecting spoofing or determining “Liveness” (defined to mean “that a living subject is present at the point of capture”).Continue Reading IntelliVision Settles FTC Allegations Regarding its Facial Recognition Technology

In a new post on the Inside Privacy blog, our colleagues discuss the Federal Trade Commission’s final “click-to-cancel” rule, which amends the previous Negative Option Rule to “make it as easy for consumers to cancel their enrollment as it was to sign up.”  The Rule imposes extensive requirements regarding misrepresentations, disclosures, and consent, among

Continue Reading FTC Issues Final “Click-to-Cancel” Rule