Rights & Ethics

Deceptive Practices

Practices likely to mislead consumers materially.

How the laws define this

Both authoritative sources establish that deceptive practices under the FTC Act fundamentally involve acts, omissions, representations, or practices that are likely to mislead a reasonable consumer. These frameworks share a core standard grounded in consumer perception, recognizing that misleading conduct can stem from omissions or misrepresentations. However, the instruments diverge significantly in their scope and specific application. The Guides Concerning the Use of Endorsements and Testimonials in Advertising focuses generally on commercial acts involving false claims, omissions, or misrepresentations where a reasonable consumer acts reasonably under the circumstances. Conversely, the FTC Proposed Policy Statement on the Suppression of Accuracy in Artificial Intelligence Systems applies Section 5 of the FTC Act to a specialized context, defining deception through misleading conduct that is material and explicitly addressing how AI companies might commit deceptive practices by manipulating system outputs contrary to consumer expectations.

Synthesised from the 2 statutory definitions below. Each one is quoted in full, with its source.

How jurisdictions differ

What is distinctive in each definition, binding law in force first.

Jurisdiction	Instrument	Status	What is distinctive
United States	Guides Concerning the Use of Endorsements and Testimonials in Advertising	In Force	This definition explicitly restricts undisclosed AI-generated content and synthetic personas in endorsements and testimonials.
United States	FTC Proposed Policy Statement on the Suppression of Accuracy in Artificial Intelligence Systems	Proposed	This definition specifically addresses AI companies manipulating system outputs contrary to consumer expectations.

What it triggers

The Federal Trade Commission's 2023 Endorsement Guides direct advertisers, endorsers, and marketing agencies to refrain from deceptive practices.source
The FTC Proposed Policy Statement on the Suppression of Accuracy in Artificial Intelligence Systems sets out that intentionally manipulating model outputs misleads consumers.source

Definitions (2)

Acts or practices in commerce that are likely to mislead a reasonable consumer acting reasonably under the circumstances, often involving false claims, omissions, or misrepresentations, prohibited by the FTC Act.

Guides Concerning the Use of Endorsements and Testimonials in AdvertisingDefinition 1 of 2

Under Section 5 of the FTC Act, a representation, omission, or practice is deceptive if it is likely to mislead a reasonable consumer in a material way. This policy statement specifically addresses how AI companies might engage in deceptive practices by manipulating system outputs contrary to consumer expectations.

FTC Proposed Policy Statement on the Suppression of Accuracy in Artificial Intelligence SystemsDefinition 2 of 2

Not to be confused with

AI-Generated Content Labeling

AI-Generated Content Labeling requires disclosure when ads are created or modified by AI, while deceptive practices prohibit undisclosed AI content that misleads.

Manipulative Outputs

Manipulative Outputs focus on AI-generated advertising exploiting cognitive vulnerabilities, whereas deceptive practices cover broader misrepresentations including false claims and omissions.

Questions and answers

What do the FTC Endorsement Guides say about AI in advertising?

The 2023 Endorsement Guides direct advertisers, endorsers, and marketing agencies to refrain from deceptive practices, explicitly restricting undisclosed AI-generated content and synthetic personas. They are enforced by the FTC.

How does the FTC address AI output manipulation?

The Proposed Policy Statement sets out that AI companies might engage in deceptive practices by manipulating system outputs contrary to consumer expectations. It guides developers and deployers on avoiding such manipulation.

What counts as deceptive under FTC AI policies?

Under both instruments, deceptive practices involve representations or omissions likely to mislead reasonable consumers materially. The Endorsement Guides focus on undisclosed AI in endorsements, while the Proposed Statement targets manipulated AI outputs.