The Federal Trade Commission (FTC) has recently green-lighted an omnibus resolution that grants authority for the use of compulsory process in nonpublic investigations. These investigations focus on products and services that utilize or claim to utilize artificial intelligence (AI), or assert to detect its use.
This newly approved resolution is designed to simplify the FTC staff’s ability to issue civil investigative demands (CIDs), a form of compulsory process akin to a subpoena. This will enhance investigations related to AI, while also maintaining the Commission’s authority to decide when these CIDs are issued. The FTC typically issues CIDs to obtain vital documents, information, and testimony that aid FTC consumer protection and competition investigations. This omnibus resolution is set to remain in effect for a decade.
AI, by definition, encompasses machine-based systems that can make predictions, recommendations, or decisions influencing real or virtual environments to fulfill a set of defined objectives. One specific type of AI, generative AI, is capable of creating synthetic content such as images, videos, audio, text, and other digital content that appears to have been created by humans. Numerous companies now offer products and services using AI and generative AI. Others provide products and services that claim to detect content generated by generative AI.
While AI, including generative AI, offers a multitude of beneficial uses, it also has the potential to be used for fraudulent activities, deception, privacy infringements, and other unfair practices. These practices may violate the FTC Act and other laws. Furthermore, AI can raise competition issues in several ways, particularly if one or a small number of companies control the essential inputs or technologies that underpin AI.
The Commission cast a unanimous 3-0 vote to approve the omnibus resolution authorizing compulsory process in investigations associated with the use of AI.
Nadine Samter and Ben Halpern-Meekin, from the FTC’s Northwest Region office, have been assigned as the lead FTC staffers for this matter.
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