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FTC calls undisclosed AI output steering deceptive under Section 5
breakthroughLegalRegulation
Tuesday, July 14, 2026
Confidence
High · — primary regulatory document plus multiple corroborating law-firm reads
Evidence
FTC proposed policy statement + Federal Register notice + legal analyses
The Federal Trade Commission published a proposed policy statement applying Section 5's deception ban to companies marketing AI systems, with comments due July 31.
- Distorting outputs for undisclosed "ideological objectives" can deceive consumers; law-firm analyses note Colorado's AI Act is treated as impliedly preempted.
- The FTC distinguishes intentional steering from hallucinations, which arise from technical limits and don't alone raise concerns.
Sources