FTC Authorizes Use of Civil Investigative Demands (CIDs) for AI-Related Products and Services

November 22, 2023 / Richard B. Newman

On November 21, 2023, the Federal Trade Commission announced that it has approved an omnibus resolution authorizing the use of compulsory process in non-public investigations involving products and services that use or claim to be produced using artificial intelligence (AI) or claim to detect its use.  The resolution will streamline the FTC staff counsel’s ability to issue civil investigative demands (CIDs), which are a form of compulsory process similar to a subpoena, in investigations relating to AI, while retaining the agency’s authority to determine when CIDs are issued.

The FTC issues CIDs to obtain documents, information and testimony that advance FTC consumer protection and competition investigations.  The omnibus resolution will be in effect for 10 years.

AI includes, but is not limited to, machine-based systems that can, for a set of defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments.  Generative AI can be used to generate synthetic content including images, videos, audio, text, and other digital content that appear to be created by humans.  Many companies now offer products and services using AI and generative AI, while others offer products and services that claim to detect content made by generative AI.

Although AI, including generative AI, offers many beneficial uses, the FTC believes that it can also be used to engage in fraud, deception, infringements on privacy and other unfair practices, which may violate the FTC Act and other legal regulations.  AI can also raise competition issues in a variety of ways, including if one or just a few companies control the essential inputs or technologies that underpin AI.

Richard B. Newman is an FTC CID lawyer and digital advertising practices attorney at Hinch Newman LLP.  

Informational purposes only. Not legal advice. May be considered attorney advertising.

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Richard B. Newman

Richard B. Newman is a nationally recognized FTC advertising compliance, CID investigation and regulatory enforcemetn attorney. He regularly provides advertising counsel and represents clients in high-profile investigations and enforcement proceedings initiated by the Federal Trade Commission, state attorneys general, departments of consumer affairs, and other federal and state agencies with jurisdiction over advertising and marketing practices. Richard is also an ecommerce lawyer and spam defense attorney. His practice additionally focuses upon false advertising defense, data privacy, cybersquatting, intellectual property law and transactional matters relating to the dissemination of national advertising campaigns, including the gamut of affiliate marketing, telemarketing, lead generation, list management and licensing agreements. Richard advises clients on how to minimize the legal risks associated with digital marketing, email marketing, telemarketing, social media influencer campaigns, endorsements and testimonials, negative option marketing models, native advertising, online promotions and comparative advertising,

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