FTC Enforcement Actions v. “Powered By AI” Claims

FTC’s “Operation AI Comply” Raised New Issues for “Powered By” AI Claims

“Powered By” Claims are Not New

In the early 2,000s, you may recall “powered by” claims relating to brands.

??? *? Example: “Powered by AWS”

??? *? Example: Powered by Google Cloud”

More recently, “powered by” claims related to Web3 technology.

??? *? Example: Powered by Ethereum”

??? *? Example: Powered by Solana”

The FTC Targeted “Powered By” AI Claims in “Operation AI-Comply” (2024)

Operation AI-Comply included three FTC enforcement actions against marketers that allegedly were deceptive, either because they:

? ??*?? Used AI hype in advertising, or

? ??*?? Marketed AI-enable technology.

Specific “Powered By” AI Earnings Claims in Operation AI-Comply

??? *? FBA Machine Enforcement Action: Earnings Claim Allegations

?? ???????? -? “AI-powered” tools to help price products in the stores and maximize profits.

??? *? Ascend Ecom

???????????? -? “Cutting edge” AI-powered tools

??? *? Ecommerce Empire Builders

??????????? -? “AI-powered Ecommerce Empire”?

-? “Skip the guesswork and start a million-dollar business today” by harnessing the ?“power of artificial intelligence”

The FTC’s Rationale

The FTC’s rationale for its Operation AI-Comply was the FTC’s belief that consumers are easily influenced by ad claims promising specific results based on AI.

??? *? Marketers are "seized on the hype surrounding AI."

??? *? Marketers used AI to:

???????? - “Supercharge: deception, and

??????? - To "Trick, mislead, or defraud,” and

??????? - To "Lure consumers into bogus schemes."

Takeaway

??? *?? The ad claims in the three cases discussed above all promised specific results in the form of earnings (earnings claims).

??? *? Expect the same result from the FTC for any ad claim that promises any specific result based on “powered by AI.”

For Informational purposes only; not legal advice

=> Download My Earnings Claims Guide for Marketers Advertisers & Agencies