The FTC, America’s AI watchdog, is losing its bite

Most Americans encounter the Federal Trade Commission only if they’ve been scammed: It handles identity theft, fraud, and stolen data. During the Biden administration, the agency went after artificial intelligence companies for scamming customers with deceptive advertising or harming people by selling irresponsible technologies. With the announcement of President Trump’s AI Action Plan, that era may now be over. In the final months of the Biden administration under chair Lina Khan, the FTC levied a series of high-profile fines and actions against AI companies for overhyping their technology and bending the truth—or in some cases making claims that were entirely false. These actions did not result in fines that crippled the companies, but they did stop them from making false statements and offered customers ways to recover their money or get out of contracts. In each case, the FTC found that everyday people had been harmed by AI companies that allowed their technologies to run amok. The new plan released by the Trump administration suggests it believes these actions went too far. In a section about removing “red tape and onerous regulation,” the White House says it will review all FTC actions taken under the Biden administration “to ensure that they do not advance theories of liability that unduly burden AI innovation.” In the same section, the White House says it will withhold AI-related federal funding from states with “burdensome” regulations.