FTC

In September, FTC Chairman Andrew Ferguson called for the FTC to regulate artificial intelligence claims through its existing consumer protection authorities:  “Imposing comprehensive regulations at the incipiency of a potential technological revolution would be foolish.  For now, we should limit ourselves to enforcing existing laws against illegal conduct when it involves AI no differently than when it does not.”  Two recently announced enforcement actions involving artificial intelligence underscore the new FTC leadership’s commitment to evaluate AI claims under traditional deception frameworks. Continue Reading FTC Challenges Deceptive Artificial Intelligence Claims

On May 9, 2025, the FTC announced that it is deferring the compliance deadline for the Negative Option Rule by 60 days to July 14.  This announcement came five days before the original compliance date for the majority of the Rule’s provisions.  All three Commissioners voted in favor of the deferral.Continue Reading FTC Delays Negative Option Rule Compliance Date to July 14

On October 16, the Federal Trade Commission (“FTC”) announced a final “click-to-cancel” rule that amends the previous Negative Option Rule to “make it as easy for consumers to cancel their enrollment as it was to sign up.” The Rule also imposes extensive requirements regarding misrepresentations, disclosures, and consent, among others. Most of the provisions will go into effect 180 days after publication in the Federal Register. As of today, the final rule has not yet been published. This final rule is the culmination of a five-year proceeding including the FTC’s issuance of a notice of proposed rulemaking (“NPRM”) in March 2023 and an advanced notice of proposed rulemaking in October 2019. We previously analyzed the proposed rule presented in the NPRM.Continue Reading FTC Issues Final “Click-to-Cancel” Rule

On August 14, the FTC announced a final rule that, according to the FTC, is intended to “combat fake reviews and testimonials.”  The rule will go into effect on October 21, 2024.  This final rule is the culmination of the FTC’s issuance of an advance notice of proposed rulemaking (ANPRM)…

Continue Reading FTC Issues Final Rule on Reviews and Testimonials

On July 9, 2024, the FTC and California Attorney General settled a case against NGL Labs (“NGL”) and two of its co-founders. NGL Labs’ app, “NGL: ask me anything,” allows users to receive anonymous messages from their friends and social media followers. The complaint alleged violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), the Children’s Online Privacy Protection Act (COPPA), and California laws prohibiting deceptive advertising and prohibiting unfair and deceptive business practices.Continue Reading FTC Reaches Settlement with NGL Labs Over Children’s Privacy & AI

Last month, the Federal Trade Commission (“FTC”) announced its enforcement action against telehealth firm, Cerebral, Inc. (“Cerebral”), for its alleged unauthorized disclosures of consumers’ sensitive personal health information and other sensitive data to third parties for advertising purposes in violation of the FTC Act.  The complaint also alleges that Cerebral violated the Opioid Addiction Recovery Fraud Prevention Act (“OARFPA”), and the Restore Online Shoppers’ Confidence Act (“ROSCA”), which permits the court to order permanent injunctive relief, civil penalties, and other monetary relief for actions in violations of specific sections of the FTC Act, the OARFPA, and the ROSCA.  According to the proposed order, Cerebral must pay more than $7 million in civil penalties and consumer refunds.  In addition, Cerebral will be banned from using or disclosing consumers’ personal and health information (including online identifiers, such as IP addresses or other persistent identifiers) for advertising and must obtain consumers’ affirmative express consent before disclosing such information to outside parties.

Below is a discussion of the complaint and proposed order.Continue Reading FTC Announces Health Privacy Enforcement Action Against Telehealth Company, Cerebral

On Friday, April 26, 2024, the Federal Trade Commission (“FTC”) voted 3-2 to issue a final rule (the “final rule”) that expands the scope of the Health Breach Notification Rule (“HBNR”) to apply to health apps and similar technologies and broadens what constitutes a breach of security, among other updates.  We previously covered the proposed rule, which was issued on May 18, 2023.

In the FTC’s announcement of the final rule, the FTC emphasized that “protecting consumers’ sensitive health data is a high priority for the FTC” and that the “updated HBNR will ensure [the HBNR] keeps pace with changes in the health marketplace.”  Key provisions of the final rule include:Continue Reading FTC Issues Final Rule to Expand Scope of the Health Breach Notification Rule

On January 9, the FTC published a blog post discussing privacy and confidentiality obligations for companies that provide artificial intelligence (“AI”) services.  The FTC described “model-as-a-service” companies as those that develop, host, and provide pre-trained AI models to users and businesses through end-user interfaces or application programming interfaces (“APIs”).  According…

Continue Reading FTC on Models-as-a-Service

On December 19, 2023, the Federal Trade Commission (“FTC”) announced that it reached a settlement with Rite Aid Corporation and Rite Aid Headquarters Corporation (collectively, “Rite Aid”) to resolve allegations that the companies violated Section 5 of the FTC Act (as well as a prior settlement with the agency) by failing to implement reasonable procedures to prevent harm to consumers while using facial recognition technology.  As part of the settlement, Rite Aid agreed to cease using “Facial Recognition or Analysis Systems” (defined below) for five years and establish a monitoring program to address certain risks if it seeks to use such systems for certain purposes in the future.Continue Reading Rite Aid Settles FTC Allegations Regarding Use of Facial Recognition Technology

On October 3, the Federal Trade Commission (“FTC”) released a blog post titled Consumers Are Voicing Concerns About AI, which discusses consumer concerns that the FTC received via its Consumer Sentinel Network concerning artificial intelligence (“AI”) and priority areas the agency is watching.  Although the FTC’s blog post acknowledged…

Continue Reading FTC Publishes Blog Post Summarizing Consumer Concerns with AI Systems