As advertisers market products that are powered by artificial intelligence, what are some key legal issues that they should consider?

In order to answer this question, I thought it would be interesting to see what ChatGPT had to say about it. So, I asked ChatGPT to "write an approximate 500 word blog post, as if written by Frankfurt Kurnit attorney Jeffrey Greenbaum, about advertising law issues related to the use of AI powered products."

Here's what ChatGPT had to say!

As AI technology continues to rapidly advance, it is increasingly being used in advertising and marketing efforts. While the use of AI-powered products can bring about many benefits, it can also raise various legal issues. In this blog post, we'll discuss some of the advertising law issues related to the use of AI-powered products.

One of the main concerns related to AI in advertising is transparency. The use of AI-powered products can make it difficult for consumers to know when they are interacting with a machine, as opposed to a human being. For example, chatbots that simulate human conversation can be used to engage with consumers online, but consumers may not realize they are talking to a machine. To address this concern, the Federal Trade Commission (FTC) has issued guidelines requiring advertisers to clearly disclose when AI is being used in their marketing efforts.

Another issue related to AI in advertising is data privacy. AI-powered products often rely on collecting and analyzing large amounts of consumer data to make predictions and recommendations. Advertisers must be careful to ensure that they are collecting and using this data in compliance with applicable laws and regulations. For example, the General Data Protection Regulation (GDPR) requires companies to obtain explicit consent from individuals before collecting and using their personal data.

The use of AI in advertising can also raise issues related to discrimination. AI-powered products may use algorithms that inadvertently discriminate against certain groups of people. For example, an algorithm used to select job candidates may be programmed to favor candidates with certain characteristics, such as a specific educational background, that may be more common among certain racial or gender groups. To avoid this type of discrimination, it is important for advertisers to carefully consider the data and algorithms used in their AI-powered products.

Another concern related to AI in advertising is intellectual property rights. AI-powered products may generate content that is protected by copyright or other intellectual property laws. Advertisers must ensure that they have the necessary rights to use any content generated by their AI-powered products, or they may face legal action.

In addition to these legal issues, advertisers must also consider ethical considerations related to the use of AI in advertising. For example, advertisers must be careful to avoid using AI-powered products in a way that could be seen as manipulative or deceptive. They must also ensure that they are not infringing on consumers' privacy rights or engaging in practices that could be seen as discriminatory.

Despite these legal and ethical concerns, the use of AI-powered products in advertising and marketing can bring about many benefits. AI can help advertisers to more effectively target their audiences, personalize their marketing efforts, and automate many time-consuming tasks. Advertisers who wish to use AI-powered products in their marketing efforts must carefully consider these legal and ethical concerns, and ensure that they are using these products in a way that is transparent, ethical, and compliant with applicable laws and regulations.

How did ChatGPT do?

Well, although ChatGPT had a few interesting things to say, I don't think my colleagues and I are going to turn over our blogging to a computer just yet. If you want some more nuanced thinking about the topics that our guest blogger touched on, I would suggest checking out some terrific posts written by my Frankfurt Kurnit colleagues about these issues, including posts on the potential for discrimination, watching out for infringement, privacy-related issues, and the FTC's views about transparency and other issues, to name a few.

Why today?

Why was today the day that I enlisted the help of ChatGPT to prepare a blog post on AI? This morning, an attorney in the FTC's Division of Advertising Practices published a post on the FTC's Business Blog, raising some questions that marketers should consider when talking about AI in their advertising. Those questions were:

  • Are you exaggerating what your product can do? In other words, just like for any other advertising claim, do you have proper substantiation to back up the claims that you are making?
  • Are you promising that your AI product does something better than a non-AI product? Similarly, just because something uses AI doesn't necessarily mean that it performs better. If you're claiming it does, you'd better have proof to back that up as well.
  • Are you aware of the risks? If you're advertising a product that uses AI, do you understand the ways in which it may not work as expected? Have you adequately communicated those risks to consumers? If not, the FTC's not going to be all that sympathetic when you claim that it was the fault of the computer (and not you).
  • Does the product actually use AI? And, finally, if you're claiming that your product is powered by artificial intelligence, that must actually be the case, of course. Just because AI was used to develop the product doesn't mean that AI is actually powering the use of the product itself.

The FTC's blog post concludes, don't "overpromise what your algorithm or AI-based tool can deliver. Whatever it can or can't do, AI is important, and so are the claims you make about it. You don't need a machine to predict what the FTC might do when those claims are unsupported."

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