The FTC applies existing consumer protection laws to AI systems with increasing scrutiny. From truth in advertising to algorithmic fairness and children's privacy, we help you navigate FTC expectations and build evidence of responsible AI practices.
The Federal Trade Commission (FTC) does not have standalone AI-specific regulations. Instead, it applies existing consumer protection laws to AI systems, including FTC Act Section 5 (unfair or deceptive practices), COPPA (children's privacy), Equal Credit Opportunity Act, and Fair Credit Reporting Act.
Why this matters now: The FTC has dramatically increased AI enforcement with settlements totaling over $5 billion and technology bans. Commissioners have stated AI is a top enforcement priority, particularly for deceptive claims, algorithmic bias, and privacy violations.
No pre-approval required, but violations carry steep penalties
Substantiation of claims and documentation of compliance efforts
See the official FTC AI hub for guidance and enforcement actions.
AI product companies
Making performance or capability claims in advertising
Financial services
Using AI for credit, lending, or insurance decisions
E-commerce platforms
AI-powered pricing, recommendations, or targeting
Healthcare providers
AI diagnostic tools or patient risk assessment
Employers and HR tech
AI hiring, screening, or workforce management systems
Consumer apps
Serving children or collecting user data for AI training
Purpose-built capabilities that address FTC enforcement priorities
Document all AI capability claims with supporting evidence and performance data. The platform maintains an audit trail of claims made in marketing materials and links them to technical validation, ensuring FTC substantiation requirements are met.
Addresses: FTC Act Section 5: Substantiation, truth in advertising
Implement continuous monitoring for algorithmic discrimination across protected characteristics. The platform tracks fairness metrics, demographic parity, and disparate impact aligned with FTC enforcement expectations and Equal Credit Opportunity Act requirements.
Addresses: ECOA, Fair Credit Reporting Act: Algorithmic fairness, bias prevention
Establish data minimization practices, consent workflows, and privacy controls for AI training and deployment. The platform documents data collection purposes, retention periods, and user consent aligned with FTC privacy expectations.
Addresses: FTC privacy enforcement: Data security, consent, minimization
Identify and eliminate deceptive design patterns in AI-powered interfaces. The platform tracks user experience decisions, disclosure implementations, and choice architecture to prevent manipulative practices the FTC targets.
Addresses: FTC Act Section 5: Deception, unfair practices prevention
Implement specialized controls for AI systems that may interact with children under 13. The platform documents age verification mechanisms, parental consent workflows, and data handling practices required under COPPA.
Addresses: COPPA: Parental consent, age verification, data restrictions
Maintain comprehensive documentation of AI governance decisions, risk assessments, and compliance efforts. The platform generates evidence packages for FTC inquiries and tracks corrective action implementation.
Addresses: FTC investigations: Documentation, remediation tracking
All compliance activities are timestamped and tracked with assigned owners. This creates a defensible audit trail showing proactive compliance efforts rather than reactive responses to FTC inquiries.
VerifyWise addresses all major FTC enforcement priorities for AI systems
FTC enforcement categories
Categories with dedicated tooling
Coverage across all priority areas
Claims verification, substantiation, marketing oversight
Bias detection, discrimination prevention, equal treatment
Data minimization, consent, security controls, breach response
Deceptive design, manipulation tactics, transparency
Document evidence for every AI performance claim before publication
Continuous monitoring for algorithmic discrimination and disparate impact
Age verification, parental consent, and children's data handling controls
Crosswalk to NIST AI RMF, EU AI Act, and CCPA requirements
Understanding where the FTC focuses its AI-related enforcement actions
False or unsubstantiated claims about AI capabilities, performance, or benefits in advertising and marketing.
Common violations
FTC requires reasonable basis for all performance claims
AI systems that produce discriminatory outcomes or disparate impact on protected groups.
Common violations
ECOA and FCRA apply to algorithmic decisions
Inadequate protection of consumer data used in AI training, deployment, or surveillance.
Common violations
Data minimization and security by design required
AI-powered interfaces designed to manipulate, deceive, or coerce consumer decisions.
Common violations
Interface design must not deceive or manipulate
AI systems that collect or use data from children under 13 without proper safeguards.
Common violations
COPPA requires verifiable parental consent
Recent AI-related settlements and consent orders demonstrate FTC priorities
| Company | Year | Violation | Penalty | Key takeaway |
|---|---|---|---|---|
| Weight Watchers (Kurbo app) | 2024 | Illegal collection and sharing of children's health data | $1.5 million | FTC alleged the Kurbo weight loss app collected personal information from children under 13 without proper parental consent, violating COPPA. |
| Amazon Ring | 2023 | Inadequate AI surveillance video security | $5.8 million | FTC charged Ring with privacy violations including allowing employees and contractors unrestricted access to customers' AI-powered surveillance video. |
| Amazon Alexa | 2023 | COPPA violations in voice data retention | $25 million | FTC alleged Amazon kept children's Alexa voice recordings indefinitely and undermined parents' deletion requests, violating COPPA. |
| Rite Aid | 2023 | Facial recognition with insufficient safeguards | 5-year ban + compliance monitoring | FTC prohibited Rite Aid from using facial recognition technology for five years after alleged deployment without reasonable safeguards against harm. |
| Twitter (X) | 2022 | Deceptive use of security data for advertising | $150 million | FTC alleged Twitter deceptively used phone numbers and email addresses collected for security purposes to target advertising. |
| Facebook/Meta | 2019 (ongoing) | Privacy violations, algorithmic discrimination | $5 billion + ongoing oversight | FTC consent order includes requirements for algorithmic accountability and privacy assessments for new AI products. |
Pattern: The FTC is increasing enforcement frequency and penalty amounts for AI-related violations. Beyond monetary penalties, the FTC now imposes technology bans, ongoing monitoring, and algorithmic auditing requirements.
Source: FTC enforcement database
A practical path to enforcement readiness with clear milestones
The FTC has authority to impose significant civil penalties, injunctive relief, and technology bans for AI violations
Civil penalties
Penalties for deceptive or unfair practices, including false AI claims and dark patterns
Civil penalties
Penalties for each violation of children's privacy rules in AI systems
Civil penalties
Additional penalties for violating FTC consent orders or settlements
Injunctive relief + damages
ECOA and FCRA violations in AI lending, credit, or employment decisions
Beyond monetary penalties: The FTC can ban specific technologies (e.g., Rite Aid's 5-year facial recognition ban), require algorithmic audits, impose ongoing monitoring, and mandate data deletion.
Each violation can be counted separately, leading to penalties far exceeding base amounts.
Access ready-to-use policy templates addressing FTC enforcement priorities, from claims substantiation to COPPA compliance
Common questions about FTC AI enforcement and compliance
Build defensible evidence of responsible AI practices with our comprehensive compliance platform.