It found that the security giant Evolv lied about the accuracy of its AI-powered security checkpoints, which are used in stadiums and schools but failed to catch a seven-inch knife that was ultimately used to stab a student. It went after the facial recognition company Intellivision, saying the company made unfounded claims that its tools operated without gender or racial bias. It fined startups promising bogus “AI lawyer” services and one that sold fake product reviews generated with AI.
These actions did not result in fines that crippled the companies, but they did stop them from making false statements and offered customers ways to recover their money or get out of contracts. In each case, the FTC found, everyday people had been harmed by AI companies that let their technologies run amok.
The plan released by the Trump administration yesterday suggests it believes these actions went too far. In a section about removing “red tape and onerous regulation,” the White House says it will review all FTC actions taken under the Biden administration “to ensure that they do not advance theories of liability that unduly burden AI innovation.” In the same section, the White House says it will withhold AI-related federal funding from states with “burdensome” regulations.
This move by the Trump administration is the latest in its evolving attack on the agency, which provides a significant route of redress for people harmed by AI in the US. It’s likely to result in faster deployment of AI with fewer checks on accuracy, fairness, or consumer harm.
Under Khan, a Biden appointee, the FTC found fans in unexpected places. Progressives called for it to break up monopolistic behavior in Big Tech, but some in Trump’s orbit, including Vice President JD Vance, also supported Khan in her fights against tech elites, albeit for the different goal of ending their supposed censorship of conservative speech.
But in January, with Khan out and Trump back in the White House, this dynamic all but collapsed. Trump released an executive order in February promising to “rein in” independent agencies like the FTC that wage influence without consulting the president. The next month, he started taking that vow to—and past—its legal limits.
In March, he fired the only two Democratic commissioners at the FTC. On July 17 a federal court ruled that one of those firings, of commissioner Rebecca Slaughter, was illegal given the independence of the agency, which restored Slaughter to her position (the other fired commissioner, Alvaro Bedoya, opted to resign rather than battle the dismissal in court, so his case was dismissed). Slaughter now serves as the sole Democrat.
In naming the FTC in its action plan, the White House now goes a step further, painting the agency's actions as a major obstacle to US victory in the “arms race” to develop better AI more quickly than China. It promises not just to change the agency’s tack moving forward, but to review and perhaps even repeal AI-related sanctions it has imposed in the past four years.