The Federal Trade Commission announced Operation AI Comply on September 25, 2024, and said it was taking action against multiple companies that relied on artificial intelligence to supercharge deceptive or unfair conduct that harms consumers.
The FTC said the sweep included cases involving an AI tool for fake reviews, a company claiming to sell AI Lawyer services and companies claiming AI could help consumers make money through online storefronts.
FTC Chair Lina M. Khan said using AI tools to trick, mislead or defraud people is illegal, and said the enforcement actions make clear that there is no AI exemption from the laws on the books.
In the DoNotPay matter, the FTC complaint says the company advertised a service as the world's first robot lawyer and claimed consumers could sue for assault without a lawyer, generate valid legal documents and replace a large legal industry with artificial intelligence.
The FTC said DoNotPay had not conducted testing to determine whether its AI chatbot output was equal to the level of a human lawyer and had not hired or retained attorneys, and the proposed order would require DoNotPay to pay $193,000 and notify subscribers who used the service between 2021 and 2023 about limits on its law-related features.
In the Ascend Ecom case, the FTC said it filed a lawsuit alleging that the business opportunity scheme falsely claimed AI-powered tools would help consumers quickly earn thousands of dollars a month in passive income by opening online storefronts.
The FTC said the Ascend Ecom complaint alleges the scheme defrauded consumers of at least $25 million, charged consumers tens of thousands of dollars to start stores and promised five-figure monthly income by the second year for stores on platforms including Amazon, Walmart, Etsy and TikTok.
In the Rytr matter, the FTC said the company marketed an AI writing-assistant service with a Testimonial & Review generation use, and the complaint alleges the service generated detailed reviews with specific material details that had no relation to the user's input.
The proposed Rytr order would bar the company from advertising, promoting, marketing or selling any service dedicated to, or promoted as, generating consumer reviews or testimonials.
For AI product teams, the policy point is narrow: the FTC is applying existing deception and unfairness rules to AI claims, AI-generated review tools and AI-backed income promises, while the cited FTC materials do not establish a new AI-specific statute.
