US AI Regulation Setback as FTC Enforcement Eases

Yesterday, the White House released its AI Action Plan under President Trump, signaling a major rollback of Federal Trade Commission oversight on artificial intelligence. Industry observers now anticipate fewer FTC enforcement actions targeting deceptive marketing and irresponsible AI deployments.

From Strict Oversight to Deregulation

Under former Chair Lina Khan, the FTC took a hard line against AI firms that overpromised accuracy or deployed biased systems. High-profile actions included:

• Evolv Security – fined for overstating AI checkpoint accuracy after failing to detect a knife threat.
• Intellivision – penalized for unsubstantiated claims of bias-free facial recognition.
• Workado – accused of deceptive AI-authorship detection without credible evidence.
• Rite Aid – banned from in-store facial recognition after false positives led to discriminatory detentions.

These cases stopped misleading advertisements, provided consumers refunds, and forced companies to overhaul monitoring and training practices. However, the new plan vows to review and potentially repeal such sanctions, framing them as “red tape” that hampers innovation.

What’s Next for AI Deployment

Experts warn that without rigorous checks on accuracy and fairness, untested AI systems could proliferate across healthcare, security, and financial services. The administration’s “try first” philosophy may speed AI adoption, but it also raises the stakes for consumer privacy and civil rights.

Leah Frazier, a former FTC attorney, cautions that responsible‐AI enforcement—especially bias testing—may virtually disappear. As companies navigate this shifting landscape, a strategic approach to monitoring and transparency will be crucial to maintain public trust.