THE RISE OF AI AND THE CRACK DOWN OF THE FTC: guidance you need to know around the use of AI from The FTC

Talks about Artificial Intelligence (AI) seem to be everywhere. It has become almost impossible to get through the day without it popping up somewhere. Maybe AI has some beneficial uses but there is a downside to all this fun tech and the FTC wants the users of AI to take heed when used for commercial purposes, as that falls directly in the FTC’s line of sight and their staff is “focusing intensely” on companies who are indulging in what AI technology has to offer.

In a blog posted by the FTC on Monday, it provides some pointed thoughts on the grey areas of AI and where potentially well-minded efforts may fall victim, well to the machine or AI as it is so lovingly known as. The AI programs companies use are only as “smart” as the data the AI platform ingests, garbage in equals garbage out. Things the FTC wants you to keep in mind if you are considering introducing this type of tool into the fold of your business practices:

The FTC is quoted as saying “But a key FTC concern is firms using them in ways that, deliberately or not, steer people unfairly or deceptively into harmful decisions in areas such as finances, health, education, housing, and employment. Companies thinking about novel uses of generative AI, such as customizing ads to specific people or groups, should know that design elements that trick people into making harmful choices are a common element in FTC cases…. Manipulation can be a deceptive or unfair practice when it causes people to take actions contrary to their intended goals. Under the FTC Act, practices can be unlawful even if not all customers are harmed and even if those harmed don’t comprise a class of people protected by anti-discrimination laws.”

If your company is actively using AI-type tools or platforms and you have a tangle with the FTC be prepared to provide your policies and procedures on how you deploy AI within your business model. The FTC will want to see how you are accessing risk, mitigation practices to prevent harm, staff training, monitoring, and auditing practices not only of the current uses but your plans for the use of AI for future business use.

The FTC’s main goal is to protect consumers stating “Under the FTC Act, a practice is unfair if it causes more harm than good. To be more specific, it’s unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and not outweighed by countervailing benefits to consumers or to competition.”

We are at the forefront of new technology which may be exciting to some but is also extremely important you understand the capabilities AI has and include well-thought parameters on how you apply it to your business model. If the FTC comes knocking, they are not going to take an “oops I didn’t know” type of answer. If you are deploying AI technology into your business practices, make sure you are buttoned up and have checks and balances in place!!


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