FTC Targets Undisclosed AI Output Steering

The Federal Trade Commission is considering whether undisclosed design choices that steer AI outputs away from users’ expected accuracy or objectivity could constitute deception under Section 5 of the FTC Act.

The proposal distinguishes intentional output steering from ordinary model errors, emphasizes prominent disclosures, and raises questions about how federal enforcement would interact with state AI requirements, including Colorado’s rules. The approach could affect model design, marketing claims, disclosure practices, and compliance strategies across consumer-facing sectors, but its legal scope remains unsettled because the policy is still proposed.