Can't Lie About Your AI: The FTC's Most Recent Case With AI Allegations

The FTC is not holding its breath on whether Congress will enact AI legislation. Instead, as we have previously reported, the FTC is relying on its own toolkit and has warned businesses that false or unsubstantiated claims related to AI could run afoul of the FTC Act.

A recent example came earlier this month, in a lawsuit the FTC filed against Automators, Inc., three principals, and several related entities. The FTC alleged that the defendants made baseless claims that consumers could make significant income by investing in ecommerce stores – promising "4k-6k consistently monthly net profits," soliciting false endorsements, and touting non-existent venture capital backing. In fact, the FTC alleged, most consumers didn't make the promised earnings or even recoup their investments. According to the complaint, defendants took in at least $22 million from consumers in connection with these unlawful practices.