FTC Proposed Policy Statement Concerning the Suppression of Accuracy in Artificial Intelligence Systems

Summary

Issued on July 1, 2026, in response to Executive Order 14365, this proposed FTC policy statement says that AI companies that distort their systems' outputs to pursue undisclosed ideological objectives may be deceiving consumers in violation of Section 5 of the FTC Act. It also says that state laws pushing companies to alter AI outputs, with Colorado's AI Act as the example, are impliedly preempted to the extent they conflict with federal law. Ordinary hallucinations are not in themselves a Section 5 issue, although misrepresenting how often they occur could be deceptive. The Commission voted 2-0 to publish it. Comments were due by July 31, 2026, and no final statement had been found by October 16, 2026.

Key dates

1. July 1, 2026Issued
2. October 16, 2026Checked against sources
3. October 21, 2026Checked against sources

Developments are added when the record is reviewed. Next review: January 15, 2027.

Evidence

Each passage is quoted from its source. The quoted passages are re-checked against the live pages every month.

1. For Release FTC Seeks Public Comment on Policy Statement Addressing AI Accuracy July 1, 2026

   Supports: Date

   The proposed statement goes on to describe how AI companies that distort their systems’ outputs to achieve undisclosed ideological objectives could be deceiving consumers in violation Section 5 of the FTC Act.

   Supports: Core theory

   The Commission’s proposed policy statement explains that such a law is “impliedly preempted to the extent it conflicts with a federal regulatory scheme.”

   Supports: State law preemption

   The public will have until July 31, 2026, to submit comments on the policy statement.

   Supports: Comment deadline

   FTC Seeks Public Comment on Policy Statement Addressing AI Accuracy Federal Trade Commission Primary source

2. the Commission does not believe that such hallucinations in and of themselves raise issues under Section 5 or any other law that the Commission enforces.

   Supports: Hallucinations not in themselves a Section 5 issue

   Federal Trade Commission's Proposed Policy Statement Concerning the Suppression of Accuracy in Artificial Intelligence Systems Federal Trade Commission Primary source