In my last column, I noted that there is general agreement that the authority of the Federal Trade Commission Act (the “Act”) is broad enough to govern algorithmic decision-making and other forms of artificial intelligence (“AI”). Section 5(a) the Act prohibits “unfair or deceptive acts or practices in or affecting commerce” as unlawful. The Federal Trade Commission (“FTC”) is authorized to challenge such acts or practices through administrative adjudication and to promulgate regulations to address unfair or deceptive practices that occur widely by multiple parties in the market.
The FTC has a department that focuses on algorithmic transparency, the Office of Technology Research and Investigation, and has requested public comment on and scheduled hearings about algorithmic decision-making and AI. The FTC has already started adjudicating complaints related to unfair practices involving AI, such as the complaint the Electronic Privacy Information Center (“EPIC”) filed against Universal Tennis Rating (“UTR”), in which EPIC alleged that UTR relied on “a secret algorithm to score children” tennis players, which “created a substantial risk of harm because children’s development, educational, scholarship, and employment opportunities may be unfairly hindered by low and inaccurate scores, the calculation of which is secret and the validity of which parents are not permitted to dispute.”
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