FTC Proposed Policy Statement on Suppression of Accuracy in AI Systems

Summary

The Federal Trade Commission proposes a policy statement that AI companies steering system outputs toward undisclosed objectives, away from those users set or reasonably expect, are likely to deceive consumers in violation of section 5 of the FTC Act. It says this holds even when done to comply with State law, citing Colorado's revised Artificial Intelligence Act, and that State law may be impliedly preempted to the extent it conflicts. Comments were due by July 31, 2026.

Who it applies to

Applies to companies that market artificial intelligence systems to consumers, as the Federal Trade Commission applies the prohibition on deceptive acts or practices in section 5 of the Federal Trade Commission Act, including where a company alters outputs to comply with a State law.

Key points

• Steering AI outputs toward unexpected objectives is likely deceptive under section 5 of the FTC Act, absent adequate disclosure.
• A disclaimer must be clear, conspicuous and prominent; burying it in terms of service would not suffice.
• Motives, including compliance with a State law, are irrelevant to whether deception occurs.
• Ordinary AI hallucinations stemming from technological limits are not themselves treated as raising issues under section 5.
• Comments were to be received on or before July 31, 2026.

Key dates

Published (official journal)

Jul 7, 2026