This is A MoFo Privacy Minute, where we will answer the questions our clients are asking us in sixty seconds or less.
Question: My company is developing an AI product. What should I know about the FTC’s recently streamlined procedure for AI-related investigations?
Answer: The FTC recently announced that it had approved an omnibus resolution authorizing it to use civil investigative demands (CIDs) in non-public investigations involving products and services claiming to use AI or detect content made by AI. CIDs are a form of compulsory process that are enforceable in court and issued to obtain the production of documents, written reports, and testimony from the target of an FTC investigation.
The FTC resolution highlights the agency’s focus on regulating the rapidly evolving use of AI and complements efforts across the federal government to mitigate the risks of AI. The FTC has repeatedly indicated that it intends to use its investigative and enforcement authority to prevent the use of AI to perpetuate fraud, deception, privacy infringements, and other unfair practices. The resolution makes this easier by allowing a single Commissioner—rather than a majority of sitting Commissioners—to approve a CID request by FTC staff in any investigation covered by the resolution for the next 10 years.
Companies developing AI and offering products or services that involve AI should assess their practices, as well as the claims they make about their offerings, to ensure they align with legal standards. They should also be prepared to explain and defend their practices if a CID comes their way.
Carson Martinez, Associate, contributed to the drafting of this alert.
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