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FTC Expands Authority to Scrutinize Artificial Intelligence Applications

The Federal Trade Commission (FTC) has expanded its investigative powers into the AI sector, enabling it to scrutinize marketing claims and algorithmic fairness.


The Federal Trade Commission (FTC) has approved a significant resolution extending its investigative powers into the artificial intelligence (AI) sector. The regulatory body now has streamlined mechanisms at its disposal for issuing civil investigative demands (CIDs) which encompass a broader scope of products and services within the AI realm.

Marketing Claims Under Vigilant Eye

The FTC's newly obtained resolution serves as a tool for the “expedited gathering of facts,” particularly concerning AI uses that carry implications for consumer protection and fair competition. A significant point of focus for the agency will be on the marketing claims made by businesses about their . Companies must possess substantial evidence to support the performance attributes they present to consumers and partners. This substantiation could include records of model training data, validation studies, and case studies demonstrating real-world impact, among others.

Businesses that make vague or unsupported statements about their AI system's capabilities could draw regulatory attention or face enforcement actions for deceptive practices. To avoid such outcomes, it is increasingly important for companies to document their claims and have proof at the ready.

Proactive Compliance and Fairness

With the growing integration of AI in decision-making, attention to algorithmic fairness and bias mitigation is more important than ever. The FTC will be ensuring that businesses proactively incorporate compliance and fairness into their product development lifecycle. Evidence of thorough design processes, risk assessments, and oversight programs will be crucial for proving that companies have exercised due diligence.

Organizations using AI must not only establish robust compliance programs but also demonstrate ongoing efforts to monitor and adjust to new challenges. Reactive measures may not be enough in the eye of regulators, who favor proactive approaches that imply awareness and readiness to rectify issues as they emerge.

Oversight Responsibilities Extend Beyond Internal Teams

The newest omnibus resolution indicates that regulatory oversight is not limited to internal operations; it extends to third-party collaborations. Companies are expected to maintain transparency and exert control over every aspect of AI-related operations, including data sourcing, model training, and enhancements provided by third-party entities. Agreements that ensure transparency and verification are now more important than ever, and routine audits are necessary to safeguard against compliance risks for both the company and the end consumers.

In conclusion, the Federal Trade Commission's expanded resolution showcases its active role in regulating the AI landscape. With additional investigatory tools at hand, the FTC is set to balance the scales of innovation and responsibility, maintaining an environment where technological advancements do not come at the expense of consumer protection and fair competition.

Innovation Challenge to Address AI Voice Risks

Earlier this month, The Federal Trade Commission launched the “Voice Cloning Challenge,” aimed at curbing the risks associated with artificially replicated voices. technology has made great progress recently, and artificial intelligence startups can make very realistic copies of real voices. A song that went viral with voice clones of famous singers shows how good the technology is and how it can be misused.

Luke Jones
Luke Jones
Luke has been writing about all things tech for more than five years. He is following Microsoft closely to bring you the latest news about Windows, Office, Azure, Skype, HoloLens and all the rest of their products.