Developing a global approach to AI governance
As AI becomes more integrated into the market, its use in advertising and marketing – and related potential – has become undeniable. AI is influencing the ways consumers interact with brands and becoming increasingly integrated into the purchasing process. In traditional consumer retail, there has been an explosion of AI-enabled “try-on” features, personalized product consultations, and chat bot influencers, as well as a surge of increasingly tailored and specifically targeted advertising based on a consumer’s behavior. In the B2B context, companies race to find ways to make their products and services more efficient (and competitive) through AI enhancements and integrations, which they then use to market those offerings.
But AI-related advertising is not without legal risk. With such ubiquitous presence comes increased scrutiny – from governmental regulators, competitors, consumer advocacy groups, and more. Consumer protection agencies have noted the potential discriminatory impacts of advertising practices based on biased algorithms, and the possible associated liabilities. There has been an uptick in activity from the United States Federal Trade Commission (FTC) expressing concern over claims relating to AI, including how it was trained, what benefits it provides, whether it functions as advertised, and whether technology is properly characterized as “AI.” Those concerns go hand-in-hand with potential Lanham Act false advertising claims, particularly to the extent the AI-related representations are deemed material. AI-generated advertising introduces a host of additional considerations, including with respect to accuracy, substantiation and the potential use of deepfakes.
As AI advertising continues to take root, companies can expect increased regulation, litigation, and policy in this space. Advertisers are well-advised to stay abreast of these developments, and to apply the principles of transparency, accuracy, human oversight, and accountability which guide the use of AI more broadly.