By: Ann-Marie Luciano and Meghan Stoppel, CIPP/US
On Tuesday, November 7, the National Association of Attorneys General (NAAG) held its Fall 2023 Consumer Protection Conference in Washington, D.C., welcoming representatives from 43 state AG offices, the FTC, and an equal number of private sector attendees. Much of the discussion revolved around how regulators draw the line when evaluating whether website designs, marketing and advertising practices, and online reviews rise to the level of an unlawful practice, as well as identifying the myriad consumer protection issues raised by generative artificial intelligence (AI). In addition to discussing examples of unlawfully deceptive practices regarding the failure to provide clear and conspicuous disclosures or substantiation, the state AGs and the FTC drew attention to their increasing focus on the enforcement against unlawfully “unfair” practices and the nuances in evaluating when a practice is unfair even if not deceptive.
Dark Patterns: Design Choices or Deliberate Attempts to Deceive Consumers?
Dark patterns—website design choices or techniques that trick or manipulate consumers into making decisions they otherwise would not choose (i.e., using cognitive biases)—continue to be a top enforcement priority for AGs and the FTC. Attorneys General Kwame Raoul of Illinois and John Formella of New Hampshire, together with representatives from both the FTC and the private sector, held a lively discussion on how dark patterns impact consumers and consumers’ privacy expectations. The four primary types of dark patterns that were discussed were those that seek to: (i) induce false beliefs; (ii) hide material information; (iii) cause unauthorized charges; or (iv) obscure privacy decisions. The panelists discussed regulators’ increasing reliance on unfairness authority (on a bipartisan basis) to address privacy harms, and the fact that regulators deem notice and consent as insufficient in the context of certain practices. Business were cautioned to be mindful of this enforcement trend and be prepared to demonstrate the countervailing benefits of website design techniques that cause consumers to make decisions they otherwise might not make.
Federal Privacy Legislation Still a Distant Prospect
The panel acknowledged that data collection in the right context can provide benefits to consumers, but stressed to businesses the importance of considering the consumers’ perspective. The topic of state privacy laws was also discussed, with AG Formella noting that New Hampshire’s law is so close to passing that the legislature has already put the money in his budget. The panelists were less confident on the prospects for federal privacy legislation.
Addressing the Scourge of Fake Online Reviews Will Require Coordinated Action
There was an insightful discussion of foundational advertising law concepts, fake online reviews, and the consumer impacts of AI. State AG and FTC attorneys talked about how and why they scrutinize advertisements from the consumer’s perspective and how the FTC’s pending rulemaking on consumer reviews may influence regulators’ expectations. State AGs, the FTC and the private sector were in agreement that addressing the scourge of fake online reviews will require coordination from all parties involved, especially as technologies like generative AI emerge that make fraudulent content all the more difficult to detect.
Generative AI Presents Novel Challenges
The discussion around AI highlighted a variety of novel issues that AI is presenting to consumers and regulators, given the paradigm-shifting ways AI is transforming industries, research, and learning. Transparency around the data sets used to inform AI, the protections built into a particular AI model, and who and how businesses use AI in their interactions with consumers were repeatedly cited as core “pillars” for evaluating the consumer risks of any AI model. This panel revealed the sheer enormity of unprecedented issues AI presents and the significant amount of work yet to be done to identify a framework and principles for addressing consumer impacts of AI.
AGs and the FTC: More Powerful Together
The biggest takeaway from this conference was the collaboration on display between the FTC and the state AGs in evaluating how new technology, website design practices, and AI affect consumers’ decisions. State and federal regulators are increasingly focused not only on objectively deceptive practices, but also on the more subtle practices that affect consumers’ decisions that the regulators perceive as against consumers’ best interests. Attendees were left in no doubt that AGs and the FTC will continue to work collaboratively to address the practices they deem to have the biggest impact on consumers.