FTC Act Section 5 (unfair/deceptive AI)
Federal Trade Commission Act Section 5 (Unfair or Deceptive Practices, applied to AI)
United States · 15 U.S.C. § 45
- Status
- In effect
- Took effect
- September 26, 1914
- Applies to
- Any business in or affecting U.S. commerce, including AI developers and companies marketing AI products
- Enforced by
- Federal Trade Commission
The FTC's basic consumer-protection law bans unfair or deceptive business practices, and the agency applies it directly to AI. Companies cannot lie about what their AI can do, use AI to deceive people, or sell AI tools designed for fraud. The FTC's 'Operation AI Comply' sweep has brought numerous cases since 2024.
Who is protected: Consumers and small businesses harmed by deceptive or unfair AI claims and AI-enabled scams
Legal detail
15 U.S.C. § 45(a) prohibits unfair or deceptive acts or practices in or affecting commerce; the FTC applies it technology-neutrally to AI marketing claims, AI-enabled fraud tools, and deceptive AI products. The Dec. 2025 AI executive order directed the FTC to issue a policy statement by March 11, 2026 on Section 5's application to AI.
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Strength | Stronger |
| Enacted | September 26, 1914 |
| Citation | 15 U.S.C. § 45 |
| Private right of action | No, agency enforcement only |
| Penalties | Injunctions, consent orders, consumer redress; civil penalties (currently $53,088 per violation) for rule or order violations |
| Topics | consumer protection · AI disclosure and transparency · automated decision-making |
| Agency page | FTC Announces Crackdown on Deceptive AI Claims and Schemes (Operation AI Comply) |
More AI rules in United States
- Trump AI Innovation & Security EO (June 2026) · In effect
- FERC order directing PJM and other grid operators to reform tariffs on… · Enacted (not yet in effect)
- Chatrie v. United States (Fourth Amendment protection for location… · Blocked / in litigation
- Kids Internet and Digital Safety Act (KIDS Act) (H.R. 7757) · Proposed / pending
- NAIC AI Evaluation Tool Pilot (12 states, 2026) · Proposed / pending
- FTC Proposed Policy Statement — AI Accuracy (July 2026) · Proposed / pending
Related consumer protection rules elsewhere
- Missouri AI Therapy Chatbot Ban (SB 1019) · In effect
- Vermont Data Broker Law (H.211) · Enacted (not yet in effect)
- Arkansas Frank Broyles Act AI amendment — voice and likeness protection (2025) · In effect
- PA v. Character.AI (Fake Psychiatrist Chatbot) · Blocked / in litigation
- NAACP v. xAI (Colossus 2 Air Pollution) · Blocked / in litigation
- RI Therapy Chatbot Ban (2026) · In effect
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