NAD Following FTC’s Footsteps In AI Regulation – New Technology

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.

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