By Jody Godoy
WASHINGTON (Reuters) – The U.S. Federal Trade Commission on Wednesday announced actions against five companies it says are using artificial intelligence in deceptive and unfair ways.
Three of the cases resulted in the suspension of operations of companies that claimed to help consumers generate passive income by opening e-commerce stores.
The FTC also settled with a company called DoNotPay over its claim to provide automated legal services, as well as with Rytr, an AI writing tool that the agency said offered functionality that allowed users to generate fake product reviews.
“Using AI tools to deceive, mislead, or defraud people is illegal,” FTC Chairwoman Lina M. Khan said in a statement. “The FTC’s enforcement actions make clear that there are no exceptions to existing AI laws.”
DoNotPay has agreed to pay $193,000 and inform customers who subscribed to its service between 2021 and 2023 of the limits of its legal functionality.
The company said it was pleased to resolve the issue, which affected a disrupted service used by only a few hundred of its millions of customers.
Rytr has agreed to stop providing review-generation services, which the FTC said some subscribers used to generate thousands of reviews through a tool that creates “compelling” or “critical” posts with little user input.
Rytr and DoNotPay have not acknowledged any wrongdoing in connection with the agreements. Rytr’s attorney did not immediately respond to requests for comment.
The two cases illustrate the internal debate within the FTC over how the regulator should approach AI. While all five commissioners agreed that it should take action against false claims about AI services, the two Republican commissioners criticized the action against Rytr, saying it expanded the FTC’s authority.
(Reporting by Doina Chiacu, editing by David Ljunggren and Aurora Ellis)