[Federal Register Volume 91, Number 128 (Tuesday, July 7, 2026)]
[Notices]
[Pages 41638-41642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-13628]
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FEDERAL TRADE COMMISSION
[File No. P264200]
Policy Statement Concerning the Suppression of Accuracy in
Artificial Intelligence Systems
AGENCY: Federal Trade Commission.
ACTION: Proposed policy statement; request for comments.
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SUMMARY: The Federal Trade Commission (``Commission'') is proposing a
policy statement regarding the application of the prohibition on
deceptive acts or practices in section 5 of the Federal Trade
Commission Act to companies that market artificial intelligence
(``AI'') systems.
DATES: Comments must be received on or before Friday, July 31, 2026.
ADDRESSES: Members of the public may file a comment online or on paper
by following the instructions in the Comment Submissions part of the
SUPPLEMENTARY INFORMATION section below. Write ``AI Policy Statement;
Matter No. P264200'' on your comment and file your comment online at
https://www.regulations.gov/docket/FTC-2026-0859. If you prefer to file
your comment on paper, mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW, Mail Stop H-144 (Annex P), Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
I. Summary
Artificial Intelligence (AI) is reshaping how Americans consume
information, educate our children, and perform our jobs.\1\ As they
have marketed their remarkable breakthroughs to the public, AI
companies have spent years representing explicitly and implicitly that
their systems aim to produce the best output--output that faithfully
and accurately achieves users' stated objectives and the built-in
objectives that users expect in the AI system--that is possible within
their technological and resource constraints. Because of these
representations and the inherent nature of the products and services in
question, consumers have a reasonable expectation that AI systems aim
to give truthful and accurate outputs. Consumers have no basis to
believe that AI systems aim to produce outputs that are distorted by
undisclosed ideological objectives.
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\1\ Executive Office of the President, Winning the Race:
America's AI Action Plan at 1 (July 2025), https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf [hereinafter ``AI Action Plan'']; The Council of Economic
Advisors, Executive Office of the President, Artificial Intelligence
and the Great Divergence at 1 (Jan. 2026), https://www.whitehouse.gov/wp-content/uploads/2026/01/Artificial-Intelligence-and-the-Great-Divergence-5.pdf.
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Nonetheless, an AI company might be tempted to alter or steer the
output of its systems contrary to consumers' reasonable expectations
for various reasons, including attempted compliance with a State law,
such as Colorado's recently revised Artificial Intelligence Act. But
steering an AI system in this manner may deceive consumers in violation
of section 5 of the FTC Act. That is true even if the deceptive
steering is done in an effort to comply with State laws. Of course, a
company may be able to avert potential deception by making truthful,
non-misleading representations about the aims of its model. But such
representations would need to make clear the AI company is prioritizing
objectives different than those consumers requested or would otherwise
expect.
II. Background
Artificial intelligence is an umbrella term covering a universe of
different tools and systems now used across nearly every sector of the
economy and in most people's daily lives.\2\ Regardless of whether one
has in mind modern large language models, AI applications applying
large-language models to particular purposes, or a not-yet-developed
superintelligence, the hallmark of a successful AI system is an ability
to accurately ``make predictions, recommendations, or decisions'' for
its user consistent with a given objective.\3\ Their utility can then
be judged by how well the solution matches consumers' objectives.
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\2\ See, e.g., E.O. 14319, Preventing Woke AI in the Federal
Government, at sec. 1, 90 FR 35389, 35389 (July 23, 2025)
(``Artificial intelligence . . . will play a critical role in how
Americans of all ages learn new skills, consume information, and
navigate their daily lives.'').
\3\ 15 U.S.C. 9401(3).
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On a fundamental level, these products and services solve problems
for people. For many Americans, they are becoming part and parcel of
daily life, relied upon for research, analysis, and advice on both
personal and business issues. This development reflects consumers'
confidence that AI companies are bound by the same rules as other
American companies: they will deal with consumers in good faith and
with no hidden agenda, and they will not work in the shadows to punish
those who hold opinions contrary to theirs. In large part, that
confidence itself reflects the basic fact that the United States is the
global standard-bearer for AI technologies.\4\ That American companies
dominate every layer of the AI ecosystem should not be taken for
granted. Geopolitical rivals are investing heavily in this sphere,
hoping to inject their own companies and values into the marketplace.
American dominance is thus about more than winning some abstract race.
It is about ensuring Americans can continue to feel their values are
being respected as they interact with, and benefit from, an AI-powered
economy.
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\4\ See J.D. Vance, Remarks by the Vice President at the
Artificial Intelligence Action Summit in Paris, France (Feb. 11,
2025), www.presidency.ucsb.edu/documents/remarks-the-vice-president-the-artificial-intelligence-action-summit-paris-france [hereinafter
``Vance AI Summit Remarks''].
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Under the President's leadership, the Trump-Vance Administration
has taken decisive steps to sustain America's global AI dominance \5\
by removing regulatory barriers that impede AI innovation.\6\ Excessive
AI regulation would undermine American AI supremacy by deterring and
suppressing the same ingenuity responsible for making American AI
great.\7\ At the same time, however, as President Trump's National
Policy Framework for Artificial Intelligence recognizes, responsible AI
innovation can co-exist with prudent guardrails. For example, AI
technologies should protect children and empower
[[Page 41639]]
parents.\8\ And most relevant to this statement, AI technologies should
not be used to silence or censor lawful expression or dissent.\9\
Importantly, President Trump's proposed approach is a national AI
framework, protecting innovation and competition by providing national
regulatory clarity and certainty and avoiding a balkanized or patchwork
regulatory approach driven by the States--or, most dangerously, imposed
by certain anti-innovation State governments on the rest of the
country.
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\5\ See, e.g., AI Action Plan, supra note 1; E.O. 14318,
Accelerating Federal Permitting of Data Center Infrastructure, 90 FR
35385, 35385 (July 23, 2025) (prioritizing the rapid and efficient
buildout of AI data centers and the infrastructure that power them
by easing Federal regulatory burdens); E.O. 14319, 90 FR at 35389
(noting agencies have an ``obligation not to procure [AI] models
that sacrifice truthfulness and accuracy to ideological agendas'');
E.O. 14320, Promoting the Export of the American AI Technology
Stack, 90 FR 35393, 35393 (July 23, 2025) (establishing a
coordinated national effort to support the American AI industry by
promoting the export of full-stack American AI technology packages).
\6\ See, e.g., E.O. 14148, Initial Rescissions of Harmful
Executive Orders and Actions, 90 FR 8237, 8240 (Jan. 20, 2025),
https://www.govinfo.gov/content/pkg/FR-2025-01-28/pdf/2025-01901.pdf
(revoking E.O. 14110, Safe, Secure, and Trustworthy Development and
Use of Artificial Intelligence, 88 FR 75191 (Oct. 30, 2023)); E.O.
14179, Removing Barriers to American Leadership in Artificial
Intelligence, 90 FR 8741, 8741-42 (Jan. 23, 2025), www.govinfo.gov/content/pkg/FR-2025-01-31/pdf/2025-02172.pdf.
\7\ E.O. 14179, 90 FR at 8741; Vance AI Summit Remarks, supra
note 4.
\8\ The White House, National Policy Framework for Artificial
Intelligence (Mar. 20, 2026).
\9\ Id.
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America's AI Action Plan and other critical executive actions
strike that balance between accelerating innovation and protecting
Americans,\10\ but anti-innovation States' recent efforts to regulate
AI are concerning. The growing number of enacted and proposed State AI
laws threatens to create a patchwork of regulatory regimes and
compliance challenges for American companies.\11\ For example, some
States have enacted laws regulating the outputs of various AI models,
ultimately requiring American companies to embed ``ideological bias
within [their AI] models.'' \12\
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\10\ See supra note 6.
\11\ See The White House, Fact Sheet: President Donald J. Trump
Ensures a National Policy Framework for Artificial Intelligence
(Dec. 11, 2025), https://www.whitehouse.gov/fact-sheets/2025/12/fact-sheet-president-donald-j-trump-ensures-a-national-policy-framework-for-artificial-intelligence/ [hereinafter ``AI National
Policy Fact Sheet''] (``State legislatures have introduced over
1,000 different AI bills[.]''); E.O. 14319, 90 FR at 35389.
\12\ See, e.g., E.O. 14365, Ensuring a National Policy Framework
for Artificial Intelligence, 90 FR 58499, 58499 (Dec. 11, 2025)
(``For example, a new Colorado law banning `algorithmic
discrimination' may even force AI models to produce false results in
order to avoid a `differential treatment or impact' on protected
groups.''); AI National Policy Fact Sheet, supra note 11 (``States
such as California and Colorado are considering requiring AI
companies to censor outputs and insert left-wing ideology in their
programming.''). Colorado has since materially revised the law
referred to by this Executive Order, but the new version poses many
of the same concerns. See infra note 43.
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On December 11, 2025, President Trump signed Executive Order 14365,
``Ensuring a National Policy Framework for Artificial Intelligence.''
\13\ The Executive Order builds on the Administration's prior work to
encourage adoption of AI and remove regulatory barriers, aiming to
``sustain and enhance the United States' global AI dominance'' by
establishing a ``minimally burdensome national policy framework for
AI--not 50 discordant State ones.'' \14\ The Executive Order directs
the Commission to issue this enforcement policy statement clarifying
the application of section 5 of the Federal Trade Commission Act (``FTC
Act'') to AI models, and in particular, address how State laws
requiring alterations to the accurate outputs of AI models can conflict
with the requirements of the FTC Act.\15\
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\13\ E.O. 14365, 90 FR at 58499.
\14\ Id.
\15\ Id. at 58500 (Section 7).
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III. The Commission's Authority Under Section 5 of the FTC Act
Nearly ninety years ago, Congress gave the Commission the authority
to protect consumers from ``unfair or deceptive acts or practices in or
affecting commerce.'' \16\ Importantly, Congress did not provide State-
law safe harbors--even where a State's laws shape the provision of
those products or services, companies must comply with section 5.
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\16\ Wheeler-Lea Act, Public Law 75-447, 52 Stat. 111 (1938)
(codified in relevant part at 15 U.S.C. 45(a)(1)).
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Section 5 of the FTC Act's prohibition on deceptive acts or
practices secures consumers' right to truth in the marketplace.\17\ In
our 1983 Policy Statement on Deception, we said ``the Commission will
find deception if there is a representation, omission or practice that
is likely to mislead the consumer acting reasonably in the
circumstances, to the consumer's detriment.'' \18\ This test, which
``undergird[s] all deception cases,'' consists of three elements.\19\
``First, there must be a representation, omission or practice that is
likely to mislead the consumer.'' \20\ ``Second, we examine the
practice from the perspective of a consumer acting reasonably in the
circumstances.'' \21\ And ``[t]hird, the representation, omission or
practice must be a material one,'' such that it is ``likely to affect
the consumer's conduct or decision with regard to a product or
service.'' \22\
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\17\ In re Int'l Harvester Co., 104 F.T.C. 949, 1056 (1984).
\18\ FTC Policy Statement on Deception (``Deception Policy
Statement''), 103 F.T.C. 174, 183 (1984), (appended to In re
Cliffdale Assocs., Inc., 103 F.T.C. 110 (1984)), https://www.ftc.gov/legal-library/browse/ftc-policy-statement-deception.
\19\ Id. at 175.
\20\ Id.
\21\ Id.
\22\ Id. Material information affects a consumer's decision to
purchase a product but may also affect other kinds of consumer
conduct. Id. at 182 n.45 (citing the Commission's complaint in
Volkswagen of America, 99 F.T.C. 446 (1982)).
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Federal courts have adopted the same principles in assessing
whether an act or practice is deceptive.\23\ Courts have also held the
Commission's deception authority covers implied misrepresentations,
half-truths,\24\ and instances where only a ``significant minority'' of
consumers are misled.\25\ Moreover, courts have recognized the
Commission's deception authority requires the entity to substantiate
the representation it makes about its products or services with
sufficient evidence.\26\ At its core, the Commission's deception
authority is based on ``well-established principles of advertising law
and common sense.'' \27\
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\23\ See, e.g., FTC v. Pukke, 53 F.4th 80, 104 (4th Cir. 2022);
FTC v. Moses, 913 F.3d 297, 306 (2d Cir. 2019); FTC v. E.M.A.
Nationwide, Inc., 767 F.3d 611, 631 (6th Cir. 2014).
\24\ See, e.g., Novartis Corp. v. FTC, 223 F.3d 783, 787 (D.C.
Cir. 2000); Fanning v. FTC, 821 F.3d 164, 170-72 (1st Cir. 2016);
Kraft, Inc. v. FTC, 970 F.2d 311, 322 (7th Cir. 1992).
\25\ ECM Biofilms, Inc. v. FTC, 851 F.3d 599, 610 (6th Cir.
2017) (quoting POM Wonderful, LLC v. FTC, 777 F.3d 478, 490 (D.C.
Cir. 2015)). A small proportion of consumers, such as 10%, can
constitute a ``significant minority.'' See, e.g., Telebrands Corp.,
140 F.T.C. 278, 325 (2005), aff'd, 457 F.3d 354 (4th Cir. 2006)
(10.5% is significant); Firestone Tire & Rubber Co. v. FTC, 481 F.2d
246, 249 (6th Cir. 1973) (10-15% is significant).
\26\ See, e.g., POM Wonderful, 777 F.3d at 490-91; FTC v. Direct
Mktg. Concepts, Inc., 624 F.3d 1, 8 (1st Cir. 2010); FTC v. Nat'l
Urological Grp., Inc., 645 F. Supp. 2d 1167, 1190 (N.D. Ga. 2008),
aff'd, 356 F. App'x 358 (11th Cir. 2009).
\27\ FTC v. Com. Planet, Inc., 878 F. Supp. 2d 1048, 1083 (C.D.
Cal. 2012), aff'd in part, 642 F. App'x 680 (9th Cir. 2016); see
also FTC v. Johnson, 96 F. Supp. 3d 1110, 1142 (D. Nev. 2015)
(rejecting ``fair notice'' argument as to section 5(a) liability and
noting there is ``extensive case law and guidance on what
constitutes a deceptive act or practice under Section 5(a)'').
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The Commission has applied the principles underlying its section 5
deception authority to address false or misleading claims in a
multitude of factual circumstances and across a wide variety of
products and services,\28\ including new and evolving technologies.\29\
And we have taken aim at companies that failed to provide adequate
disclosures,\30\ as well as
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governmental and private standard-setting entities that sought to
restrict truthful advertising.\31\
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\28\ See, e.g., FTC v. Fleetcor Techs., Inc., 620 F. Supp. 3d
1268, 1289-1313 (N.D. Ga. 2022) (fuel cards and discounts), aff'd
sub nom FTC v. Corpay, Inc., 164 F.4th 807 (11th Cir. 2026); FTC v.
D-Link Sys., Inc., No. 3:17-CV-00039-JD, 2017 WL 4150873, at *2
(N.D. Cal. Sept. 19, 2017) (data security and protections for IoT
devices); Pom Wonderful, 777 F.3d at 490-500 (dietary supplements);
Com. Planet, Inc., 878 F. Supp. 2d at 1083 (online web pages and
negative option plans).
\29\ See, e.g., Stipulated Order, FTC v. Amazon.com, Inc., No.
2:23-CV-00932-JHC (W.D. Wash. Sept. 25, 2025), Dkt. No. 535
(enrolling consumers into online shopping memberships without
consumers' express informed consent); Compl., United States v.
Facebook, No. 19-cv-2184 (D.D.C. July 24, 2019), Dkt. No. 1
(misrepresenting that users would have to ``turn[] on'' facial-
recognition technology); Compl., FTC v. New Consumer Sols., LLC, No.
1:15-cv-01614 (N.D. Ill. Feb. 23, 2015), Dkt. No. 1 (misrepresenting
ability to detect melanoma by analyzing pictures of consumers'
skin); Compl., In re Sears Holdings Mgmt. Corp., FTC Docket No. C-
4264 (Sept. 9, 2009) (tracking consumers' ``online browsing'').
\30\ See, e.g., FTC v. LendingClub Corp., No. 18-CV-02454-JSC,
2020 WL 2838827, at *6 (N.D. Cal. June 1, 2020) (inadequate
disclosures of loan origination fees); see also FTC v.
Cyberspace.Com LLC, 453 F.3d 1196, 1200 (9th Cir. 2006) (``A
solicitation may be likely to mislead by virtue of the net
impression it creates even though the solicitation also contains
truthful disclosures.'').
\31\ See, e.g., In re Am. Med. Ass'n, 94 F.T.C. 701, 235 (1979)
(restricting physician advertising).
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IV. Deceiving Consumers as to the Objectives of an AI System Is a
Section 5 Violation
AI products and services are not exempt from section 5's long-
established, and generally applicable reach. The Commission has already
brought a number of recent enforcement actions to combat deceptive
claims in connection with AI-powered scams, as well as material
misrepresentations about the performance, efficacy, and characteristics
of AI products.\32\ For instance, the Commission recently invoked well-
established section 5 principles to address an AI company's misleading
claims about the ability of its conversational AI tool to replace human
customer service representatives.\33\ Although the Commission is
careful to avoid unduly burdening innovation in the AI industry,\34\
the Commission will continue to protect consumers and the market from
deceptive or unfair business practices, including those relying on AI
systems or technologies, by using well-established section 5
principles.
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\32\ See, e.g., Consent Order, In re Workado, LLC, No. C-4822
(F.T.C. Aug. 21, 2025) (deceptive claims regarding accuracy or
efficacy of its AI-content detection products), https://www.ftc.gov/system/files/ftc_gov/pdf/ContentatScaleAI-DecisionandOrder.pdf;
Stipulated Order, FTC v. TheFBAMachine Inc., No. 24-cv-6635-JXN-LDW
(D.N.J. July 31, 2025), Dkt. No. 162 (falsely guaranteeing consumers
could make money operating online storefronts using AI-powered
software); Consent Order, In re DoNotPay, Inc., FTC Docket No. C-
4812 (Jan. 14, 2025) (deceptive claims about the ability of its AI
chatbot to replace the services of a human lawyer), https://www.ftc.gov/system/files/ftc_gov/pdf/2323042_donotpay_decision_and_order_0.pdf; Consent Order, In re
Intellivision Techs. Corp., No. C-4809 (F.T.C. Jan. 8, 2025)
(deceptive claims regarding accuracy or efficacy of its AI-powered
facial recognition software), https://www.ftc.gov/system/files/ftc_gov/pdf/2323023c4809intellivisionfinalorder.pdf; Stipulated
Order, FTC v. Evolv Techs. Holdings, Inc., No. 1:24-cv-12940-PGL (D.
Mass. Nov. 26, 2024), Dkt. No. 2 (false claims about the efficacy of
its AI-powered security screening system for detecting weapons).
\33\ See Compl., FTC v. Air Ai Techs., Inc., No. 2:25-cv-03068-
SMB (D. Ariz. Aug. 25, 2025), Dkt. No. 1 (deceptive claims regarding
efficacy and profitability related to the company's ``conversational
AI'' product).
\34\ In fact, the Commission has already taken steps to address
these unnecessary burdens, for example, by setting aside the
previous Commission's order against a generative AI company. See
Order Reopening and Setting Aside Order at 5, In re Rytr LLC, FTC
Docket C-4806 (Dec. 22, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/Rytr-Order.pdf (``Where actors use AI to violate the law
or deceive consumers about the capabilities of their generative AI,
they should be held accountable, as the FTC has done and will
continue to do. But that is not the case here. Rushing in to impose
aggressive law enforcement unsupported by facts or law is improper
and is not in the public interest.'').
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In marketing their products as problem-solving tools, AI companies
have represented explicitly and implicitly that their AI systems aim to
produce the best output possible given technological and resource
constraints.\35\ AI companies aggressively market themselves as
building products and services that distill all of human knowledge to
solve problems, large and small, in furtherance of users' given
objectives.\36\ This is because companies know their success depends on
their products' utility, and an AI system's utility is a function of
its ability to accomplish the objectives users ask it to
accomplish.\37\
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\35\ See, e.g., OpenAI, Why Language Models Hallucinate (Sept.
5, 2025) (``At OpenAI, we're working hard to make AI systems more
useful and reliable. Even as language models become more capable,
one challenge remains stubbornly hard to fully solve:
hallucinations.''), https://openai.com/index/why-language-models-hallucinate/; Anthropic, Claude Product Overview, https://claude.com/product/overview (last visited May 22, 2026) (``Meet your
thinking partner . . . Tackle any big, bold, bewildering challenge
with Claude . . . The AI for problem solvers . . . Tackle your
toughest work . . . Like an expert in your pocket . . . There's
never been a worse time to be a problem, or a better time to be a
problem solver . . . What problem are you up against?''); Anthropic,
How People Ask Claude for Personal Guidance, https://www.anthropic.com/research/claude-personal-guidancehttps://www.anthropic.com/research/claude-personal-guidance (Apr. 30, 2026)
(``Helpfulness is one of Claude's most important traits. Speaking
with Claude should be akin to a conversation with a brilliant
friend, one who will speak frankly to a person about their
situation, providing information grounded in evidence.''); X.ai,
Chat With Grok, https://x.ai/grok (last accessed May 20, 2026)
(``Grok is your truth-seeking AI companion for unfiltered answers
with advanced capabilities in reasoning, coding, and visual
processing.'').
\36\ See, e.g., Anthropic, Claude, https://claude.com (last
visited May 22, 2026) (``What is Claude and how does it work? Claude
is an artificial intelligence, trained by Anthropic using
Constitutional AI to be safe, accurate, and secure--the trusted
assistant for you to do your best work. . . . What should I use
Claude for? If you can dream it, Claude can help you do it. Claude
can process large amounts of information, brainstorm ideas, generate
text and code, help you understand subjects, coach you through
difficult situations, simplify your busywork so you can focus on
what matters most, and so much more.''); OpenAI, ChatGPT
Capabilities Overview https://help.openai.com/en/articles/9260256-chatgpt-capabilities-overview (last visited Mar. 17, 2026) (touting
ChatGPT's ability to solve problems); OpenAI, Extracting Insights
with ChatGPT Data Analysis, https://help.openai.com/en/articles/9213685-extracting-insights-with-chatgpt-data-analysis (last visited
Mar. 17, 2026) (claiming ChatGPT can identify missing or outlier
data); OpenAI, ChatGPT for Healthcare, https://help.openai.com/en/articles/20001046-chatgpt-for-healthcare (last visited Mar. 17,
2026) (``ChatGPT for Healthcare can pull from millions of peer-
reviewed studies, clinical guidelines, and public health sources''
to ``[g]et clinical answers with citations'' that ``perform[] better
than human baselines across every role measured'').
\37\ Similarly, an ability to make accurate predictions,
correctly solve problems, or make good decisions hinges on AI
systems operating without undisclosed ideological biases that
contradict explicit and implicit claims of accuracy and neutrality.
Though the exact line of what constitutes bias may be difficult to
draw, forcing an AI system to prioritize a singular ideological
objective over all else is on the wrong side. See Concurring
Statement of Comm'r Andrew N. Ferguson, In re IntelliVision Techs.
Corp., Matter No. 2323023, at 1 (F.T.C. Dec. 3, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/intellivision-ferguson-concurrence.pdf.
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Consumers share this understanding of the purpose of AI systems and
have learned to trust these systems across a broad swath of
applications, from education to health, finance, relationships or a
myriad of other uses.\38\ In fact, according to one major AI developer,
consumers accept AI system outputs without conducting any further fact
checking over 90% of the time, even though these systems purport to
only strive for, rather than guarantee, complete accuracy.\39\ In other
words, consumers ask AI systems for help answering deeply personal and
important questions, and they overwhelmingly trust that the system is
designed to provide an answer tailored specifically to their
objectives.\40\ And because of both the companies' marketing and the
inherent value proposition of an AI system, this widely
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held consumer expectation is eminently reasonable.
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\38\ Paulo Vargas, Your Teen Is Probably Using AI for Homework,
Digital Trends (Mar. 2, 2026) (``More than half of U.S. teens ages
13 to 17 say they have turned to chatbots . . . for school
tasks.''), https://www.digitaltrends.com/computing/your-teen-is-probably-using-ai-for-homework/; Walt Williams, Survey: Consumers
Increasingly Turn to AI for Financial Advice, ABA Banking Journal
(Sept. 2, 2025) (``A majority of consumers are turning to artificial
intelligence for financial advice . . . .''), https://bankingjournal.aba.com/2025/09/survey-consumers-increasingly-turn-to-ai-for-financial-advice/; Theo Burman, Americans Are Using AI To
Diagnose Their Health Issues, Newsweek (July 20, 2025) (``Both
clinicians and patients are using artificial intelligence more and
more to help diagnose illness and injuries . . . .''), https://www.newsweek.com/ai-healthcare-diagnosis-chatgpt-doctor-2100091; How
People Ask Claude for Personal Guidance, Anthropic (Apr. 30, 2026)
(finding 12% of all conversations with the Claude program concerned
relationship navigation, 6% concerned personal development, and 4%
concerned spirituality), https://www.anthropic.com/research/claude-personal-guidance.
\39\ Ted Ladd, Anthropic: 91% of Users Do Not Fact-Check AI.
Let's Fix That, Forbes (Mar. 5, 2026), https://www.forbes.com/sites/tedladd/2026/03/05/anthropic-91-of-users-do-not-fact-check-ai-lets-fix-that/.
\40\ Reasonable consumers would not expect, of course, that an
AI system would output content that is clearly and unequivocally not
protected by the First Amendment, such as child pornography. And
nothing in this statement shall be construed to prohibit companies
from imposing limits on model use to prevent cybersecurity attacks.
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Of course, AI systems are likely to simultaneously pursue multiple
objectives, some explicit and some implicit. This will often be
consistent with consumers' reasonable expectations. Users of an AI
chatbot might, for example, reasonably expect the system to balance
succinctness, clarity, relevance, accuracy, and other objectives in its
attempt to produce the best output. And while truth and accuracy are in
many cases implicit objectives in requests to AI systems, a user could
request output that is intentionally inaccurate or that deprioritizes
accuracy in favor of some other objective like entertainment.
These representations and baseline consumer expectations
notwithstanding, AI companies might steer their systems' outputs toward
objectives other than those that consumers ask for or expect. A company
could be tempted, for example, to abuse consumer trust by training a
model surreptitiously to produce ideologically motivated distortions in
a response to a factual question, such as to correct what the developer
believes are ``historical injustices'' in the facts.\41\ Or a company
could be pressured by a State law to alter its technology's outputs.
The original version of Colorado's Artificial Intelligence Act,\42\ for
example, imposed a broad duty on AI companies to avoid output that
might lead to disparate impacts in various contexts, including when a
customer's foreseeable use of that output could itself create a
disparate impact. And the revised version of that law explicitly
provides AI companies can be held liable for discriminatory outcomes
caused by their customers' use of their products.\43\ It is predictable
that an AI company might suppress accuracy and interpose other
objectives, such as so-called ``equity,'' to avoid liability under this
law, but fail to disclose these ulterior objectives in order to hide
the loss of accuracy they necessitate.\44\ AI companies may also be
subject to public pressure to surreptitiously avoid politically
inflammatory outputs, as well as the temptation to clandestinely modify
their AI systems to further their own or their employees' political
agendas.
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\41\ See, e.g., Leo Briceno, Anthropic's Moral Compass Architect
Suggested AI Overcorrection Could Address Historical Injustices, Fox
News (Apr. 22, 2026), https://www.foxnews.com/politics/anthropics-moral-compass-architect-suggested-ai-overcorrection-could-address-historical-injustices.
\42\ Colo. Sen. Bill 24-205 (enacted May 17, 2024), repealed and
reenacted, as amended, by Colo. Sen. Bill 26-189 (enacted May 14,
2026).
\43\ Colo. Sen. Bill 26-189, 6-1-1707 (enacted May 14, 2026).
\44\ See E.O. 14281, Restoring Equality of Opportunity and
Meritocracy, at sec. 1, 90 FR 17537 (Apr. 23, 2025) (``Disparate-
impact liability all but requires individuals and businesses to
consider race and engage in racial balancing to avoid potentially
crippling legal liability. . . . On a practical level, disparate-
impact liability has hindered businesses from making hiring and
other employment decisions based on merit and skill, their needs, or
the needs of their customers because of the specter that such a
process might lead to disparate outcomes, and thus disparate-impact
lawsuits. . . . Disparate-impact liability imperils the
effectiveness of civil rights laws by mandating, rather than
proscribing, discrimination.''). Indeed, it seems likely a law
restricting truthful speech because it might lead another person to
commit disparate impact discrimination would not survive First
Amendment scrutiny, but that is orthogonal to the FTC Act issues we
address here.
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In light of the above, the Commission believes AI companies that
steer the outputs of their AI systems toward unexpected objectives, and
away from the objectives set by or reasonably expected by users, are
likely to deceive \45\ consumers in violation of section 5 of the FTC
Act.\46\ AI companies have made both explicit and implicit
representations that their systems aim to produce outputs that achieve
users' objectives as faithfully and accurately as they can.\47\ Those
representations, absent adequate disclaimers or qualifications, are
material as consumers rely on them and are likely to consider, in their
decision as to which AI system to use or pay for, whether a particular
system is designed to produce output accomplishing their objectives or
to intentionally produce a worse output in service of another
objective. Consumers may be induced to pay for a service that does not
behave as advertised. Consumers may also be deceived into relying on a
technology that, by design, produces worse outputs and may recommend
suboptimal courses of action, not because of any technological or
resource limitations, but because the AI developer's hidden agenda
subverted consumers' objectives.
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\45\ The Commission at this time takes no position on whether
the practices discussed in this statement may also be unfair under
the FTC Act.
\46\ This conduct is distinct from the problem of incorrect
output from AI systems, frequently called ``hallucinations,'' that
stem not from a design decision to prioritize objectives contrary to
users' reasonable expectations, but from the technological and
resource limitations AI systems necessarily reflect. While a company
may, for example, unlawfully deceive consumers if it misrepresents
the likelihood of such hallucinations, the Commission does not
believe such hallucinations in and of themselves raise issues under
section 5 or any other law the Commission enforces.
\47\ See supra notes 35 & 36.
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As is always the case, a company's motives for deceiving consumers
are irrelevant to the application of section 5.\48\ Whether motivated
by profit, shaping public opinion, or anything else, section 5
prohibits deceiving consumers. These prohibitions apply even when a
company engages in a deceptive act or practice in order to comply with
a State law. Although the FTC Act does not expressly preempt State law,
State law is impliedly preempted to the extent it conflicts with a
Federal regulatory scheme.\49\ A State law that requires an AI firm to
deceive its consumers obviously conflicts with section 5's express
purpose of protecting consumers from such conduct.
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\48\ FTC v. Bay Area Bus. Council, 423 F.3d 627, 635 (7th Cir.
2005) (deception); In re Kraft, Inc., 114 F.T.C. 40, 122 (1991)
(deception).
\49\ Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300 (1988)
(``[S]tate law is pre-empted when it actually conflicts with federal
law. Such conflict will be found when it is impossible to comply
with both state and federal law, or where the state law stands as an
obstacle of the full purposes and objectives of Congress.''
(internal quotations omitted)).
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An AI company can, of course, take actions that shape consumer
expectations in ways that make it unreasonable for consumers to believe
the AI system is designed to achieve the objectives that consumers
would otherwise expect. A company can, for example, clearly and
conspicuously disclose that its systems are designed to produce outputs
that prioritize certain objectives over what users request and
otherwise expect. But such a disclaimer would have to be adequate to
shift consumer expectations that would be based otherwise both on
companies' explicit representations and on the inherent value
proposition of AI systems as tools to solve human problems. An adequate
disclaimer could not be buried in terms of service, for instance. It
would have to clearly and conspicuously dispel the notion that the
system is designed to give the best answer possible. Such a disclaimer
would need to be prominent, and it is doubtful a one-time disclosure
subsequently hidden away in fine print would suffice. The more the
disclosure cuts against the reasonable expectations users would take
away from other contexts, the more persistent and prominent it would
need to be.\50\ A prominent misrepresentation is unlikely to be
remedied by a less prominent,
[[Page 41642]]
subsequent disclosure.\51\ Ultimately, it is the company's
responsibility to ensure compliance with section 5.
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\50\ FTC v. Direct Mktg. Concepts, Inc., 624 F.3d 1, 12 (1st
Cir. 2010) (explaining disclaimers ``are not adequate to avoid
liability unless they are sufficiently prominent and unambiguous to
change the apparent meaning of the claims and to leave an accurate
impression'')); Removatron Int'l Corp. v. FTC, 884 F.2d 1489, 1497
(1st Cir.1989) (``[d]isclaimers or qualifications in any particular
ad are not adequate to avoid liability unless they are sufficiently
prominent and unambiguous to change the apparent meaning of the
claims and to leave an accurate impression.'').
\51\ See, e.g., Deception Policy Statement at *48, supra note 18
(``Depending on the circumstances, accurate information in the text
may not remedy a false headline because reasonable consumer may
glance only at the headline.''); see also FTC v. Corpay, Inc., 164
F.4th 807, 836 (11th Cir. Jan. 6, 2026) (disclaimers or qualifying
language may not correct a misleading impression when the disclaimer
``is small, ambiguous, or contradicted by the body of the ad'')
(citing FTC v. Cyberspace.com LLC, 453 F.3d 1198, 1200-01 (9th Cir.
2006); FTC v. Direct Mktg. Concepts, Inc., 624 F.3d 1, 12 (1st Cir.
2010) (explaining disclaimers ``are not adequate to avoid liability
unless they are sufficiently prominent and unambiguous to change the
apparent meaning of the claims and to leave an accurate
impression''); Removatron Int'l Corp. v. FTC, 884 F.2d 1489, 1497
(1st Cir.1989) (``[d]isclaimers or qualifications in any particular
ad are not adequate to avoid liability unless they are sufficiently
prominent and unambiguous to change the apparent meaning of the
claims and to leave an accurate impression.'').
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V. Comment Submissions
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before Friday, July 31,
2026. Write ``AI Policy Statement; Matter No. P264200'' on your
comment. Your comment--including your name and your State--will be
placed on the public record of this proceeding, including, to the
extent practicable, on the https://www.regulations.gov website.
We encourage you to submit comments through the https://www.regulations.gov website. Postal mail addressed to the Commission
will be subject to delay because of heightened security screening. If
you prefer to file your comment on paper, write ``AI Policy Statement;
Matter No. P264200'' on your comment and on the envelope, and send it
via overnight service to: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex P),
Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including competitively sensitive information such
as costs, sales statistics, inventories, formulas, patterns, devices,
manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the https://www.regulations.gov website--as legally
required by FTC Rule 4.9(b)--we cannot redact or remove your comment
from that website, unless you submit a confidentiality request that
meets the requirements for such treatment under FTC Rule 4.9(c), and
the General Counsel grants that request.
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding,
as appropriate. The Commission will consider all timely and responsive
public comments it receives on or before Friday, July 31, 2026. For
information on the Commission's privacy policy, including routine uses
permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2026-13628 Filed 7-6-26; 8:45 am]
BILLING CODE 6750-01-P