In a recent public comment addressed to the United States Copyright Office, the Federal Trade Commission seemingly expanded upon remarks made at the National Advertising Division back in September that it will aggressively and proactively challenge alleged unfair practices involving artificial intelligence, even if that means stretching the meaning of “unfair” to increase its jurisdiction over such matters.

The FTC’s submission was provided in response to the Copyright Office’s call for public comments as part of a study, commenced in August 2023, on copyright matters implicated by AI.  Although the FTC has not historically been involved in copyright matters, the submission made clear that it has an “interest in many of the difficult questions … about where to draw the line between human creation and AI-generated content.” 

In the FTC’s opinion, several of those questions related to “liability issues arising from the development or deployment of generative AI,” such as how “liability principles” should be applied to “harm caused by AI tools trained on creative work that are used to generate new content[.]”  The FTC concluded that these “liability questions implicate consumer protection and competition policy.”

As an example, the FTC pointed to “circumstances” in which “the use of pirated or misuse of copyrighted materials could be an unfair practice or unfair method of competition under Section 5 of the FTC Act.”  Such circumstances, according to the FTC, could encompass conduct which may violate copyright laws, including “training an AI tool on protected expression without the creator’s consent or selling output generated from such an AI tool[.]”

The FTC cautioned, however, that compliance with copyright laws would not serve as a blanket immunization from liability under Section 5 of the FTC Act.  It singled out, for example, large technology companies that may use their “vast financial resources” to “indemnify the users of their generative AI tools or obtain exclusive licenses to copyrighted (or otherwise proprietary) training data.”  

Noting that there is “no AI exemption from the laws on the books,” the FTC ended its submission by vowing to “vigorously use the full range of its authorities to protect Americans from deceptive and unfair conduct and maintain open, fair, and competitive markets.”  On this point, the FTC “look[ed] forward to collaborating with the U.S. Copyright Office as competition and consumer protection issues surrounding AI-enabled tools and technologies continue to develop.” 

In sum, the FTC appears poised to readily enforce Section 5 in the AI space, consistent with the bold technology agenda of FTC Chairwoman, Lina Khan, who has been an outspoken critic of so-called “Big Tech.”