Despite the lack of immediate federal legislation addressing the regulation of AI, it is apparent that US federal agencies, including the Federal Trade Commission (FTC), are underscoring the need for regulated entities to ensure that AI utilization complies with existing laws and regulations. This message is being conveyed through different measures, with the FTC ensuring that companies under its jurisdiction do not employ AI to instigate unfair or deceptive acts as stipulated under Section 5 of the FTC Act.
This reminder recently came to light in a legal update posted on JD Supra, which cited law firm Skadden, Arps, Slate, Meagher & Flom LLP. The update provides a cautionary note to corporations about their legal obligations when using generative artificial intelligence (AI).
The general acceptance and penetration of AI into various spheres of corporate activity has been a welcome development. However, the FTC’s reminder shows the necessity of aligning AI application with existing legal frameworks. Particularly crucial is the avoidance of AI applications that might be perceived as unfair or deceptive, thus falling foul of section 5 of the FTC Act.
This development is a reminder that, while AI presents a plethora of opportunities for improved efficiency and results across various sectors, corporations must remain cognizant of their legal obligations. Companies must ensure that their use of AI tools doesn’t contravene the law and ultimately harm consumers.
Businesses are advised to actively monitor updates from the FTC and other regulatory bodies regarding AI use. This would help them maintain a clear understanding of their legal obligations and avoid potential infractions.