The FTC has made good on its promise to crack down on suspected deceptive AI claims, announcing legal action against five outfits accused of lying abo

FTC sues five AI outfits – and one case in particular raises questions

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2024-09-28 09:30:03

The FTC has made good on its promise to crack down on suspected deceptive AI claims, announcing legal action against five outfits accused of lying about their software's capabilities or using it to break the law.

Two of the cases have already been settled. The other three are choosing to take the matter to court, the US regulator said. All five were targeted by the consumer watchdog in its so-called Operation AI Comply.

Those three entities that want to take this matter to trial - Ascend Ecom, Ecommerce Empire Builders, and FBA Machine - were all accused of offering some variation of a scheme that promised customers high earnings in exchange for setting up and managing an online storefront that utilized their AI. In each case, the FTC said, the claims were unlawfully false, and victims lost millions after paying for inventory, training, and the use of ready-made e-commerce shops, in the hopes of earnings that never materialized.

Ascend Ecom, Ecommerce Empire Builders, and FBA Machine each have court orders against them, halting their operations, while proceedings against them continue.