As AI-powered chat bots, voice cloning, and deepfakes cause increasing harm to consumers (and celebrities like Taylor Swift), the FTC is seeking public comment on whether to expand its “Rule on Impersonation of Government and Businesses” to expressly prohibit the impersonation of individuals. The FTC’s proposed amendments to the Impersonation Rule come after a nationwide surge in complaints relating to fraud losses as well as “public outcry” about the harms caused to impersonated individuals.

The Rule was recently updated to allow the FTC to seek monetary relief against scammers that impersonate (or falsely imply an affiliation with) the U.S. government. When the FTC sought public comment on that update, many of the commenters pointed out the potential harms posed by the false impersonation of individuals, which prompted the FTC to prepare these amendments.

AI users and vendors should take note that the proposed amendments go beyond prohibiting fraudulent impersonations of celebrities. First, the amendments define “individual” as any person or entity, “whether real or fictitious.” Second, and more critically, if implemented, the proposed amendments will extend liability for violations of the Rule to parties who provide “goods and services with knowledge or reason to know” they “will be used in impersonations” that violate the Rule. The FTC stated that the amended Rule would not “impose new burdens on honest individuals or businesses.” 

Specifically, the amendments provide that that it is violation of the Rule, and an unfair or deceptive act or practice, to: (a) materially and falsely pose as, directly or by implication, an individual, in or affecting commerce; or (b) materially misrepresent, directly or by implication, affiliation with, including endorsement or sponsorship by, an individual, in or affecting commerce.

The public has 60 days from February 15, 2024 to submit comments on the FTC’s proposal.

Stay tuned for updates on this and other AI-related developments.