On February 13, the Federal Trade Commission (FTC) released a blog post warning companies that it could be deemed an unfair or deceptive practice for a company to adopt more permissive data practices and to only inform consumers of such changes through retroactive amendments to its terms of service or privacy policy.

In the blog post, entitled “AI (and other) Companies: Quietly Changing Your Terms of Service Could Be Unfair or Deceptive,” the FTC described the increasing need companies have for raw data to drive AI product innovation. It also pointed out that many of these companies have access to the data they need in their userbase. However, the FTC notes that these companies, while incentivized to convert user data into fuel for their AI products, also have existing commitments to protect their users’ privacy.

The FTC believes that this stance is consistent with its past enforcement actions and makes clear that a business that collects user data based on one set of privacy commitments cannot then unilaterally change those commitments after collecting the data. The FTC cautioned that it “will continue to bring actions against companies that engage in unfair or deceptive practices — including those that try to switch up the ‘rules of the game’ on consumers by surreptitiously re-writing their privacy policies or terms of service to allow themselves free rein to use consumer data for product development.”

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