government policy United States comment period 6/10
Government · Federal Trade Commission

The FTC proposed a policy statement applying section 5 deception principles to companies marketing AI systems. It says undisclosed steering of outputs away from users' stated or reasonably expected objectives may be deceptive, while ordinary hallucinations caused by technological limitations are treated differently. The document is proposed and non-final; comments were due July 31, 2026.

Action required

Monitor the FTC proceeding and assess whether any final policy statement is issued. No current binding compliance action is established by the supplied proposed document.

Binding status

proposed

Governing body

Federal Trade Commission

Direction

restrictive

Innovation impact

mixed

Enforcement details

Agency

Federal Trade Commission

Compliance requirements

Required disclosures

  • Clear and conspicuous disclosures of objectives that cause an AI system to prioritize outcomes different from those users request or reasonably expect; the proposed statement says disclosures should not be buried in terms of service.

Prohibited practices

  • Undisclosed steering of AI outputs toward unexpected objectives may constitute deceptive conduct under the proposed interpretation.

Transparency requirements

  • Make disclosures about prioritized objectives clear, conspicuous, prominent, persistent where necessary, and sufficient to alter reasonable consumer expectations.

AI technologies

large language models; generative ai; nlp; foundation models

Affected industries

technology; advertising; consumer-facing AI services

Affected roles

general counsel; compliance officer; product manager; chief ai officer

Frameworks

ftc

Cross-references

Cites laws

Section 5 of the Federal Trade Commission Act; 15 U.S.C. 45(a)(1)

Enriched 2026-07-07 · resolved via federal register complete

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