FTC Enforcement on AI (Section 5 of the FTC Act)
Issued by
Federal Trade Commission
- September 30, 2026 · Substantive update — Rewrote the entry around the FTC's AI enforcement under Section 5; it previously described the agency's internal AI compliance plan. The cases were checked against ftc.gov. (Cody Maxwell)
- October 1, 2026 · Correction — Rewrote the practical steps, newsletter hook, search description, and audience fields to match the entry's corrected content. (Cody Maxwell)
The Federal Trade Commission (FTC) enforces US consumer protection law against companies that make deceptive claims about AI or use AI in unfair ways. It relies on Section 5 of the FTC Act, which bans unfair or deceptive practices, plus trade rules on fake reviews and impersonation. There is no exemption for AI. Any company selling AI products or using AI with US consumers is in scope.
Applies To
Overview
The FTC has no AI-specific statute. It applies Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce. The agency treats AI products and AI claims like any other product and claim. Its cases fall into three groups: false or unproven claims about what AI can do, harmful uses of AI, and AI used to deceive people. Claims about AI must be true and backed by evidence. In September 2024 the FTC announced Operation AI Comply, a set of cases against companies using AI hype to mislead customers. One target, DoNotPay, marketed a "robot lawyer" it had not tested against the work of real lawyers. The FTC has also acted against Evolv Technologies over AI weapons-screening claims and IntelliVision over claims that its facial recognition was free of bias. A 2025 order requires Workado to stop overstating the accuracy of its AI content detector. Harmful use of AI can be an unfair practice even without a false claim. In December 2023 the FTC banned Rite Aid from using facial recognition for surveillance for five years. Its system had wrongly flagged customers as likely shoplifters, with women and people of color among those most affected. The FTC can also order companies to delete data collected improperly and any models built from it. Two trade rules add civil penalties. The rule on consumer reviews and testimonials, in force since October 2024, bans fake reviews, including reviews written by AI. The rule on government and business impersonation, in force since April 2024, covers AI-powered impersonation scams. Priorities shift with each administration. The July 2025 AI Action Plan directed the FTC to review earlier AI investigations and orders that could unduly burden innovation. In December 2025 the FTC set aside its earlier order against Rytr, an AI writing tool. Deception cases have continued, including Air AI in March 2026 and Cox Media Group in August 2026.
Key Requirements
- •Back every claim about what an AI product can do with competent and reliable evidence before making it.
- •Do not claim a product uses AI when it does not, and do not overstate how much it does.
- •Test AI systems for foreseeable harm, such as inaccurate or biased results, before using them on consumers.
- •Do not publish fake reviews or testimonials, including ones written by AI (16 CFR Part 465).
- •Do not use AI to impersonate government agencies or businesses (16 CFR Part 461).
- •Expect FTC orders to require deleting improperly collected data and models built from it, plus years of compliance reporting.
What Your Organization Must Do
- →Collect written evidence supporting every AI capability claim before marketing publishes it, and keep that evidence on file.
- →Audit product pages, decks and demos for AI claims the product cannot actually deliver.
- →Test consumer-facing AI tools for inaccurate or biased outputs before launch, and record the results.
- →Ban AI-written reviews and testimonials in marketing and agency contracts, citing 16 CFR Part 465.
- →Prepare for orders requiring deletion of improperly collected data and models trained on it.
- →Track shifting FTC priorities, including the 2025 review of earlier AI investigations and orders.
Governance Controls
Operational controls that implement requirements from this regulation.
Frequently Asked Questions
- Does the FTC regulate AI?
- Not through an AI-specific law. It enforces Section 5 of the FTC Act against unfair or deceptive practices, and that law covers AI products and AI claims. It also enforces trade rules on fake reviews and impersonation that apply when AI is involved.
- What is AI washing?
- AI washing means overstating how much a product uses AI or what its AI can do. The FTC treats unsupported AI claims like any other false advertising. Operation AI Comply, announced in September 2024, targeted several companies for this kind of claim.
- Can the FTC make a company delete an AI model?
- Yes, in several settlements the FTC has required companies to delete improperly collected data and the models or algorithms trained on it. Everalbum in 2021 and WW International's Kurbo app in 2022 are examples.
- Are AI-generated reviews illegal?
- Fake reviews are banned under the FTC's rule on consumer reviews and testimonials, in force since October 2024. The rule covers reviews that misrepresent who wrote them or their experience, including reviews generated by AI. Violations can bring civil penalties.
- Does FTC enforcement cover business-to-business AI products?
- Often it does, because Section 5 protects businesses as well as individual consumers. Several Operation AI Comply cases involved schemes that sold AI-powered income opportunities to would-be business owners.