The Federal Trade Commission (FTC) has been incredibly active recently, juggling multiple initiatives aimed at protecting consumers and regulating businesses. Just a month earlier, the FTC concluded an arduous legal process, ending with a legal ruling that banned employers from imposing noncompete agreements on their employees. That’s far from the only work being done by the agency.
Other FTC actions include implementing a rule outlining how companies should handle user’s sensitive information, and urging for legislative changes to increase the FTC’s enforcement capabilities. Now, the FTC is tackling the complexities brought about by AI, proposing a rule that would impose liability on companies that knowingly, or have reason to know, their products or services will be used in impersonation scams.
The recently implemented FTC rule, which prohibits government and business impersonations, has now expanded the agency’s ability to seek monetary relief from scammers. FTC Chair Lina Khan affirmed that the aim is to strengthen the FTC’s toolkit to tackle AI-enabled scams.
As encouraging as these initiatives may be, they’re not without their critics. Daniel Kaufman, a partner at Baker & Hostetler and former acting director of the FTC’s Bureau of Consumer Protection finds the “knowledge or reason to know” provision vague and broad, raising legal and regulatory questions that are likely to be subject to further deliberation.
In the near future, we can expect artificial intelligence to become a more prominent issue. Sandra Talbott, deputy director of the DOJ’s Procurement Collusion Strike Force, noted that “fraud involving AI is still fraud.” As AI technologies advance and become more widespread, their potential for misuse increases, necessitating vigilant regulatory oversight. But we should bear in mind, that as Andrew Perlman, Dean of Suffolk University Law School contends, the advent of AI is going to exceed the significance of the internet and search engines, and we’re just getting started.
For more details regarding the FTC’s busy schedule and the new amendments they are implementing, please find additional information in this Law.com article.