The Gist

  • Overuse of the term 'AI.' The popularity of chatbots has led to the overuse of the term "AI" in advertising, and the FTC warns advertisers to ensure that their products actually use AI and to be aware of potential risks.
  • FTC guidelines on advertising AI products. The FTC cautions advertisers against making false promises about AI product capabilities and encourages responsible use of AI in advertising.
  • Launch of FTC Office of Technology. The new FTC Office of Technology will focus on AI-related topics such as artificial intelligence, machine learning and human-computer interaction design.

Over the past few months, AI chatbots have exploded in popularity. ChatGPT is being joined by similar tools, such as Google’s Bard and Bing’s AI chatbot. The artificial intelligence topic has spread in conversations everywhere from talk shows to schools, but it’s worth noting that “AI” doesn’t refer exclusively to chatbots.

Unfortunately, the popularity of the term has led to its overuse in the advertising industry. And the Federal Trade Commission (FTC) is sending marketers and advertisers a clear message about what they say about artificial intelligence and their products.

FTC Warns Against False Promises

The FTC published a post addressing this issue on Feb. 27. The post from the FTC Division of Advertising Practices cautioned advertisers against making false promises about their AI products’ capabilities. It also encouraged taking care with AI products, cautioning that “you can’t say you’re not responsible because that technology is a ‘black box’ you can’t understand or didn’t know how to test.”

Related Article: What Is the AI Bill of Rights and How Does it Affect Marketing, CX?

Guidelines for Keeping AI in Check

The post gives a few guidelines for posing questions to keep AI advertising in check.

Learning Opportunities

  • Are you exaggerating what your AI product can do?
  • Are you promising that your AI product does something better than a non-AI product?
  • Are you aware of the risks?
  • Does the product actually use AI at all?

Related Article: How the FTC's Children's Data Collection Complaint Against WW Impacts Marketers

Three Key Laws for AI Issues

The FTC makes a point to note that these AI issues are not new, referencing a 2021 post that discusses three key laws:

  • Section 5 of the FTC Act: Prohibits unfair or deceptive practices
  • Fair Credit Reporting Act Applies when an algorithm is used to deny people benefits such as insurance or housing
  • Equal Credit Opportunity Act Makes it illegal to use a biased algorithm resulting in discrimination based on “race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance”

The FTC Launches Office of Technology

Additionally, the FTC launched its new Office of Technology on Feb. 17. Many of the office’s focus areas are AI-related, such as artificial intelligence, machine learning and human-computer interaction design. According to the FTC, The Office of Technology will "boost the FTC’s expertise to help the agency achieve its mission of protecting consumers and promoting competition."

"For more than a century, the FTC has worked to keep pace with new markets and ever-changing technologies by building internal expertise," FTC Chair Lina M. Khan said in a statement. "Our office of technology is a natural next step in ensuring we have the in-house skills needed to fully grasp evolving technologies and market trends as we continue to tackle unlawful business practices and protect Americans."

fa-regular fa-lightbulb Have a tip to share with our editorial team? Drop us a line: