FTC's Smith Cautions Companies on Protecting Consumer Rights Amid AI
The FTC Wednesday cautioned companies about risks to consumers of artificial intelligence technology used to make predictions, recommendations or decisions. AI could enable “unfair or discriminatory outcomes” or the perpetuation of existing socioeconomic disparities, blogged Competition Bureau Director Andrew Smith.…
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Companies using AI should take care not to mislead consumers about the nature of an interaction, he said, citing “engager profiles” of attractive potential mates to induce customers to sign up for a dating service. How companies get data is important: Secretly collecting sensitive data could give rise to an FTC action, Smith said, noting Facebook misled consumers last year by telling them they could opt in to facial recognition even though the setting was on by default. Companies that make automated decisions based on third-party information may have to provide consumers with an “adverse action” notice, explaining their right to see information reported about them and to correct inaccurate information.