FTC Warns: Don't Make Your AI Dumber on Purpose
Published Date: 7/7/2026
Notice
Summary
The Federal Trade Commission is making it clear: AI companies can’t hide behind sneaky tricks that make their systems less accurate on purpose. If you build or sell AI, you need to be honest about how your tech works and not mislead users. Comments on this new policy are open until July 31, 2026, so AI makers should pay attention now to avoid future fines or trouble.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
FTC: No Secretly Skewed AI Answers
The Federal Trade Commission says AI companies may not secretly make their systems less accurate or steer outputs toward undisclosed objectives because that conduct is likely deceptive under Section 5 of the FTC Act. The statement (published in the Federal Register on July 7, 2026) warns consumers that companies must not mislead users about an AI system's aims, and the FTC will use its deception authority against such practices.
Must Disclose If Accuracy Is Deprioritized
The FTC says an AI company can avoid deception only by making clear, conspicuous disclosures when its system prioritizes objectives other than accuracy. Disclosures cannot be hidden in terms of service; they must be prominent enough to change reasonable consumer expectations.
State Laws Can't Require Deceptive Outputs
The FTC states that a State law that requires AI companies to alter outputs in a way that deceives consumers conflicts with Section 5 of the FTC Act and is impliedly preempted. The Commission makes clear that complying with a State law is not a defense if the compliance causes deception of consumers under Section 5.
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Key Dates
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