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Six takeaways from recent FTC rulings and what they mean for your AI governance program
Learn more about what the recent FTC rulings mean for the nuances of responsibilities when it comes to AI, the importance of customer data protection, and the role of consent in deploying AI
Lauren Diethelm
AI Content Marketing Specialist
February 21, 2024
In the ever-evolving landscape of AI regulation, recent rulings from the Federal Trade Commision (FTC) have shed light on crucial aspects that impact providers, deployers, and users of AI systems. As AI technology advances and more regulations continue to pass, it’ll become increasingly important to understand the impact of these rulings.
Here, we’ll dive into six key takeaways from the recent FTC rulings and what they mean for your own AI governance program.
1. Deployers of AI systems have just as much of a role to play in responsible use of AI as providers
There’s a lot of emphasis placed on providers and developers of AI systems (conducting conformity assessments, etc.), but recent rulings from the FTC serve as a reminder that deployers need to be paying just as much attention.
Things like considering and assessing risk, testing and documenting systems, vetting third party vendors, and regularly monitoring systems for change in accuracy are all things that deployers of AI systems need to be aware of.
Deployers of AI systems also have an additional responsibility: to ensure their employees are adequately trained on the AI policies put in place. Giving users the opportunity to opt out of their data being used in an AI system, for instance, is a requirement for the use of many different AI systems – but is rendered almost useless if the employees responsible for implementing the removal of that data aren’t aware of where, when, or how to do it.
Regardless of the type of AI you’re planning on governing in your organization, it’s important to remember and have a plan documented for your role and the responsibilities associated with it.
2. Responsibilities and consequences in AI governance are nuanced
Recent rulings from the FTC have carried different levels of consequences. The orders have varied from addressing the moral obligations to protect consumers from the harms caused by bias all the way through to creating concrete policies, informing employees of those policies, and ensuring ongoing enforcement.
The variance in these considerations means that AI governance is nuanced – there’s no one response to a breach of trust when it comes to AI, and governance committees need to be prepared to think through every angle and potential consequence before deploying a system.
3. Protecting customer data remains a priority
Recent rulings and a warning to AI companies more broadly all stress the importance of protecting customer data – including making disclosures where appropriate, not selling or sharing private data, and getting consent for its use, among other things.
These decisions also serve as a reminder that AI systems devour data. And though regulations for AI are still developing, AI systems and companies, including model-as-service companies, aren’t exempt from the existing laws that protect privacy and the use of data more broadly. This may seem obvious to most privacy professionals, but these recent rulings show that diligence is always required.
4. Consent is especially key in deploying AI
These recent orders from the FTC also remind companies considering the use of AI-assisted biometric technology that they need to think through:
- How they are informing consumers about the use of that technology
- How users can contest their enrollment (and how employees are trained to remove contested data)
- How to develop a consumer complaint system to allow business to effectively and promptly address their concerns
- And the need to have robust testing in place to avoid bias against certain groups
These considerations extend past biometric tech, which in many use-cases is considered prohibited use by the EU AI Act anyway. Regardless of the type of AI system being used or the risk level associated, all AI systems are using data provided by or connected to real people.
Companies using AI need to ensure that they give users on both ends clear transparency into what data is collected, how it’s used, and, perhaps most importantly, clear and understandable steps for how users can opt out.
5. Transparency efforts can’t be done quietly
The most recent guidance from the FTC reminds all companies, and AI companies in particular, that informing consumers of changes to their data policies through surreptitious or retroactive amendments may be unfair or deceptive.
This means that simply checking the box of alerting consumers of changes to your policies isn’t enough – the method of that alert matters perhaps just as much. To be a meaningful effort in transparency, the consent you gather from your consumers can’t be artificial consent; it must be communicated clearly and understandably to those users.
6. There’s no US federal law for AI, but that doesn’t mean there’s no enforcement
The FTC’s actions in all these cases also throw into relief the patchwork system that’s in place for AI regulation now – but that doesn’t mean companies can’t be held accountable.
Consent and transparency are essential in deploying AI systems, and in the absence of a comprehensive federal law for AI, the FTC is prepared to weigh in, monitor, and enforce compliance with existing privacy laws to ensure both those requirements are met.
Understanding the complexities of AI governance
All these rulings underscore the intricate and evolving nature of AI governance. As organizations continue to embrace AI, they must recognize the shared responsibility between providers and deployers, prioritize the protection of customer data, and meticulously consider the consequences of their AI actions.
This guide will help you ensure you’re thinking through every angle of using AI systems as you’re setting up your AI governance program. To learn how OneTrust can help you begin your work with AI governance, request a demo and speak with an expert today.
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