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United States (federal) · Law

FTC Act Section 5: unfair or deceptive practices

In forceFTC Act §5

Summary

There is no general federal AI law, but the FTC uses Section 5 to act against false or unsupported claims about what an AI product does and against unfair uses of technology, such as facial recognition without safeguards. Since 2024 it has brought more than a dozen "AI washing" cases, including business-to-business ones. In 2025 the FTC set aside its Rytr order and now focuses more on deceptive claims than on possible misuse of AI tools.

Who it applies to

Businesses that advertise, sell or use AI with US consumers or business customers, including foreign companies with US customers.

Penalties

Cease-and-desist orders, consumer refunds, technology bans (Rite Aid: 5-year facial recognition ban) and civil penalties for violating an FTC order or rule.

Official name
Federal Trade Commission Act, Section 5 (15 U.S.C. § 45)
Official reference
15 U.S.C. § 45; casos de la FTC sobre IA (Operation AI Comply, 2024-2026; orden Rite Aid, 2023)
Regulator
Federal Trade Commission (FTC)
Official source
Check the sourceHow we verify sources

Key dates

Obligations and dates

Obligations table
ObligationArticle or citationStatusDateWho it applies toVerification
Substantiate every AI claim before publishing it15 U.S.C. § 45(a); FTC Policy Statement Regarding Advertising SubstantiationIn forceAlready applicableApplies if you sell or promote products or services described as "AI-powered" or your advertising claims AI capabilities. Using AI to create marketing content does not by itself trigger this obligation unless the ad makes claims about AI.Pending confirmation in the official source (last checked: November 4, 2026)
Safeguards before using facial recognition or other biometrics15 U.S.C. § 45(n) (prácticas desleales); FTC v. Rite Aid (2023), orden de consentimientoRegulator guidanceAlready applicableRelates to anyone using facial, voice or emotion recognition, or processing biometric data of people in the US. These are reference measures taken from the FTC's Rite Aid order, which binds only that company.Pending confirmation in the official source (last checked: November 4, 2026)

Substantiate every AI claim before publishing it

15 U.S.C. § 45(a); FTC Policy Statement Regarding Advertising SubstantiationIn force

Already applicable

When it relates
Applies if you sell or promote products or services described as "AI-powered" or your advertising claims AI capabilities. Using AI to create marketing content does not by itself trigger this obligation unless the ad makes claims about AI.
What the rule provides
  • Claims about AI accuracy, results, savings or autonomy must be backed by reasonable evidence before they are published.
  • Do not say a product uses AI if it does not, and do not overstate what it does.
  • Review sales and marketing material (website, ads, client proposals) against written criteria.
Typical evidence
  • Evidence file for each claim (tests, metrics, date, model version)
  • Approval log for AI marketing messages
Verification
Pending confirmation in the official source (last checked: November 4, 2026)The legal basis (15 U.S.C. § 45(a)) is checked on govinfo. FTC cases on AI claims and their dates come from secondary sources; no official text sets which evidence suffices in each case, so it is presented as enforcement practice.

Safeguards before using facial recognition or other biometrics

15 U.S.C. § 45(n) (prácticas desleales); FTC v. Rite Aid (2023), orden de consentimientoRegulator guidance

Already applicable

When it relates
Relates to anyone using facial, voice or emotion recognition, or processing biometric data of people in the US. These are reference measures taken from the FTC's Rite Aid order, which binds only that company.
What the rule provides
  • Assess risks before deployment, including error rates across demographic groups.
  • Test accuracy and bias, and repeat tests periodically.
  • Notify affected people and offer a way to complain.
  • Train and supervise staff who act on system alerts.
Typical evidence
  • Biometric system impact assessment
  • Accuracy and bias test reports
  • Log of incidents and false positives
Verification
Pending confirmation in the official source (last checked: November 4, 2026)Reference measures taken from the Rite Aid order, which binds only that company; the FTC presents them as a reference for others. The official press release (Dec 19, 2023) confirms consumer notice, complaint handling and deletion of biometric data within five years. The pre-deployment risk assessment and periodic testing must be checked in the order text (case page on ftc.gov).

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