Michelle ThompsonUS businesses could face federal scrutiny if they attempt to covertly utilize customers’ personal data for training artificial intelligence models, as cautioned by the government this week.
The Federal Trade Commission (FTC), the primary agency overseeing privacy and consumer protection in the nation, emphasized the significant value of Americans’ personal data. This data is already instrumental in guiding recommendations on platforms like Netflix, Amazon, and Google.
However, as companies rush to adopt AI technology, there’s a concern that this valuable personal data might be increasingly used to fuel more sophisticated AI models without adequate transparency. The FTC highlighted the risk of companies updating their privacy policies without sufficiently informing consumers about their intentions to use personal data for AI training, potentially violating the law.
The FTC warned against companies surreptitiously altering their privacy policies to freely use consumer data for product development, stressing the importance of genuine and transparent consent from consumers.
This guidance reflects the growing efforts of federal agencies to address the risks and potential harms associated with AI, particularly in the absence of comprehensive congressional regulation.
The FTC’s advisory coincided with a similar caution from Gary Gensler, the head of the Securities and Exchange Commission (SEC), who warned publicly traded companies about potential violations of US securities law if they mislead investors regarding the capabilities of their AI tools.
The FTC has also reminded companies not to make exaggerated claims about AI capabilities, emphasizing its authority to enforce various laws related to consumer protection and deceptive practices, including the Fair Credit Reporting Act and the FTC Act.
