AI Marketing Claims Under FTC Scrutiny
January 16, 2025
Privacy Plus+
Privacy, Technology and Perspective
Let's start the New Year by examining a concerning trend: the exaggeration of Artificial Intelligence (AI) capabilities in product marketing. When a revolutionary technology takes the stage—especially one which has massive potential for disruption, but poorly understood mechanics—salespeople often succumb to overstating their products' capabilities. We've seen this pattern before with "smart" and blockchain technologies. Now, AI takes center stage.
Recent FTC Enforcement Actions
In late 2024 and already in 2025, the Federal Trade Commission (FTC) has brought enforcement actions against two businesses for allegedly overstating their AI-powered solutions.
The Evolv Technologies Case
Evolv Technologies markets weapon-detection systems to schools and public venues across forty states. The company claims its AI-powered detectors can:
· Detect all weapons
· Ignore harmless items without requiring removal from pockets or bags
· Provide faster and more accurate detection than traditional metal detectors
· Reduce false alarms and labor costs
The FTC alleges these claims are exaggerated, violating Section 5 of the FTC Act.
You can read more about this case by clicking the following link:
The accessiBe Case
In another enforcement action, the FTC challenged accessiBe's assertions that its AI technology could automatically make websites compliant with Web Content Accessibility Guidelines (WCAG) for visitors with disabilities.
Again, the FTC alleges these claims are exaggerated, violating Section 5 of the FTC Act.
You can read more about this case by clicking the following link:
Our Thoughts
We appear to be in AI's "magical early days," when merely invoking its presence bestows credibility on products and services. Anecdotally, we hear of many salespeople offering products that “have AI!” Yet, when pressed about specific functionalities, data safeguards, or confidentiality measures, they can’t answer.
“Having AI” is not enough. The gap between AI marketing claims and actual capabilities—including specifications and safeguards—often represents a significant disconnect.
It’s time for a reminder of the law on this: everyone should understand that advertising must be truthful, both literally and impliedly…
The Prior Substantiation Rule:
While truthful advertising is fundamental, fair competition also demands more. The FTC's Prior Substantiation Rule requires advertisers to possess reasonable “substantiation” (proof) of their claims before making them. Good intentions or subsequent validation are insufficient—claims must be substantiated in advance, at a level appropriate to the circumstances. Not doing so – even if you turn out to be right – is an unfair and deceptive practice.
You can read about the Prior Substantiation Rule by clicking the following link:
https://www.ftc.gov/legal-library/browse/ftc-policy-statement-regarding-advertising-substantiation
Key Takeaway:
Simply "having AI" is not a prudent marketing strategy. Companies must ensure their AI-related claims are not only truthful but properly substantiated before publication. Through its recent enforcement actions, the FTC makes clear that the emerging AI marketplace must be built on honest representations, not hype.
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Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.