The two big consumer protection regulation stories out of the FTC this month are Negative Options and AI.
The FTC’s Negative Option rule would, among other things, require sellers to make it as easy for consumers to cancel their enrollment as it was for them to sign up and allow the FTC to obtain civil penalties for rule violations. Manatt has unpacked the rule in more detail in the article Sellers Beware: FTC Proposes Changes to Automatic Renewal Laws and the downloadable webinar Automatic Renewal Laws: Everything to Know About the Surge in Litigation and Regulatory Enforcement. The FTC published its proposed Negative Option rulemaking on April 24, giving any interested commenters until June 23 to provide input.
The second item out of the FTC rulemaking gate is a request for comment on Business Practices for Cloud Computing Providers. The Commission has signaled a particular interest in the potential anticompetitive effects of cloud computing with respect to the health care, finance, transportation, eCommerce and defense industries. While the comment requests are broad, one prominent line of inquiry is the effect of artificial intelligence on anticompetitive behavior. To that end, the Commission has requested comment on:
(1) The extent to which AI products and services are dependent on the cloud provider they are built on, and
(2) How the use of AI will affect competition among cloud providers now and in the future.
The FTC extended the cloud computing comment period to June 21, just a week after issuing a Joint Statement with three other agencies on the need to regulate AI. Manatt provides key takeaways from the new regulatory approach to AI in the article AI Has Captured the Attention of the U.S. Public—and Federal Enforcers. We expect these comments will likely result in FTC rulemaking on AI-related issues in the near to medium term. Our updated tracker is below.