FTC Frames AI Output Steering as a Potential Section 5 Risk | JD Supra

The FTC issued a proposed policy statement treating undisclosed output steering in AI systems as potential deception under Section 5 of the FTC Act, even when companies claim compliance with state law. The statement creates enforcement risk for AI providers that market systems as accurate or objective while secretly altering outputs toward undisclosed objectives, and opens a comment period closing 31 July 2026. If you build or sell an AI system, the FTC now treats hidden steering toward undisclosed objectives as deception—even if you're complying with state law—and will enforce this from 31 July unless your disclosures are genuinely clear and conspicuous enough to wipe out any contrary impression from your marketing. Submit a comment by 31 July or accept that your product design and claims are now FTC Section 5 targets.