NAD Following FTC's Footsteps in AI Regulation

During the recent ANA Advertising Law 1-Day Conference at Katten’s New York office, Laura Brett, Vice President of the National Advertising Division (NAD) at BBB National Programs, confirmed that NAD is currently reviewing AI-related advertising claims in a number of pending monitoring cases. The details of the cases are not public at this time. But Brett was clear that NAD is looking into truth-in-advertising issues regarding AI and Generative AI (GenAI), including claims that misrepresent the capabilities of AI or how/whether AI is used in a product or service. 

Brett advised that NAD is following the FTC's AI regulatory actions and guidance very closely and is thinking about how NAD can provide guidance on the self-regulatory front. For example, Brett pointed to FTC's litigation targeting claims of AI-powered investment strategies. She also noted the FTC's position that broad privacy policies may fail to put consumers on notice that their data will be used to train AI models.

The bottom line is that the leading regulatory and self-regulatory bodies in the United States are keenly focused on AI and GenAI truth-in-advertising issues. As explained in a previous post, the compliance starting point for advertisers is: do not overstate, understate, or discriminate.