FTC threatens to go after businesses that overhype AI claims: 'Our bread and butter'
Federal Trade Commission swipes at 'AI hype'
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The Federal Trade Commission issued a warning on Monday, telling businesses to "keep [their] AI claims in check."
Michael Atleson, an attorney for the FTC Division of Advertising Practices, wrote in a blog post that it's no wonder Americans can "be primed" to accept marketers' pitches regarding new tools and devices that "supposedly reflect the abilities and benefits of artificial intelligence" following years of science fiction and fantasy.
He said that while the term "artificial intelligence" is ambiguous, it is also a hot marketing term – something that advertisers "won’t be able to stop themselves from overusing and abusing."
The FTC hit at "breathless media accounts" and businesses promoting and developing the "AI hype."
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The Federal Trade Commission headquarters in Washington, D.C., on Feb. 17, 2023. (Ting Shen/Bloomberg via Getty Images / Getty Images)
"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. "In some cases, this lack of efficacy may exist regardless of what other harm the products might cause. Marketers should know that – for FTC enforcement purposes – false or unsubstantiated claims about a product’s efficacy are our bread and butter."
Those using artificial intelligence are being asked to consider several factors.
Google AI on a mobile phone on Feb. 9, 2023, in Brussels, Belgium. (Jonathan Raa/NurPhoto via Getty Images / Getty Images)
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Claiming AI can do something beyond its current capacity or for certain types of users under certain conditions would be deceptive. Furthermore, advertisers need "adequate proof" for claims that AI products do something better than a non-AI product. The FTC also notes that businesses need to know about reasonably foreseeable risks and the impact of the AI product before putting it on the market. Lastly, it says marketers cannot get away with baseless claims that a product is AI-enabled.
Those using artificial intelligence are being asked to consider several factors by the Federal Trade Commission. (Ting Shen/Bloomberg via Getty Images / Getty Images)
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"Advertisers should take another look at our earlier AI guidance, which focused on fairness and equity but also said, clearly, not to overpromise what your algorithm or AI-based tool can deliver. Whatever it can or can’t do, AI is important, and so are the claims you make about it," he concluded. "You don’t need a machine to predict what the FTC might do when those claims are unsupported."