But now the company faces a new test in Washington, where the FTC has issued multiple warnings that existing consumer protection laws apply to AI, even as the administration and Congress struggle to outline new regulations. Mail Stop: CC 6316 . And we'll tell you what matters for investors in Europe, giving you insight before trading begins. FTC hits BetterHelp with $7.8M fine - Becker's Hospital Review Ms. Khans strategy may take years to pay off, said Megan Gray, a lawyer and a former member of the F.T.C.s staff. Consumers subsequently lost access to their life savings, college funds, and money saved for retirement. The F.T.C. The FTC says that Celsius and its top executives also failed to deliver the returns they promised on consumers' cryptocurrency. Some of that criticism is partisan, advanced well before Khan came into the role, and some reflects genuine concerns about lower morale and the FTCs case processes, including around antitrust. The reality is we are a global market, and you are thinking only of who you want to go after for some reason. Slate, The agency made extensive demands about records related to ways OpenAIs products could generate disparaging statements, asking the company to provide records of the complaints people send about its chatbot making false statements. Researchers at labs like OpenAI have designed neural networks that analyze vast amounts of digital text, including Wikipedia articles, books, news stories and online chat logs. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. On Thursday, he tweeted that it was super important that OpenAIs technology was safe. Tech expertise, Soltani noted, is another gap that more resources could help fill. is a partnership of Last week's Betterhelp ban follows on the heels of Telehealth.org's February announcement of 1) an FTC crackdownon GoodRX and 2) inquiries by a bi-partisan group of US Senators of telehealth companies Monument, Workit Health and Cerebral for failure to protect their patient's sensitive health data by sharing it with marketing websites. The FTC warned in its press release, [l]et this proposed order be a stout reminder that the FTC will prioritize defending Americans sensitive data from illegal exploitation.. is acting on A.I. While each country has different laws, the FTC has far fewer resources, while still bearing responsibility for protecting the privacy of hundreds of millions of people. Final Decision and Order (347.12 KB) File. The complaint against Amazon follows a slate of recent FTC enforcement actions, each targeting violations of Americans privacy and abuses of their data. When consumers visit the Complaint Assistant from their mobile device, theyll be presented with a format that is simpler to navigate on a smaller screen and without a keyboard. The FTC itself is intentionally headed by a bipartisan group: It has five commissioners, and no more than three can be from the same party. Even as its fiscal health declined, the companys top executives concealed this information from the public, telling consumers that customers deposits were safe and soliciting new customers just days before it froze customer accounts and filed for bankruptcy, according to the FTC. On Thursday, the F.T.C. F.T.C. Is Investigating ChatGPT Maker [I]t is very disappointing to see the FTCs request start with a leak and does not help build trust, he tweeted. But he said its unclear if the agency has the authority to police defamation or the contents of ChatGPTs results.. Online service BetterHelp refunding customers for sharing health data To sign up, individuals must complete a web-based intake form and create an account. OpenAI has already come under regulatory pressure internationally. It seems unlikely this will lead to a sudden crackdown, but it shows that the FTC is doing more than warning the AI industry of potential violations. Specifically, the FTC alleged that, among other things, BetterHelp shared customers sensitive health data with third parties such as Facebook and Snapchat for advertising purposes, contrary to online representations the company made to customers. The agency may not have the knowledge to fully vet answers from OpenAI, said Megan Gray, a former staff member of the consumer protection bureau. Todays action banning Celsius from handling peoples money and holding its executives accountable should make clear that emerging technologies are not above the law., New Jersey-based Celsiuswhich filed for bankruptcy in July 2022marketed a variety of cryptocurrency products and services to consumers, including interest-bearing accounts, personal loans secured by their cryptocurrency deposits, and a cryptocurrency exchange. PDF Federal Trade Commission | Protecting America's Consumers This kind of investigation doesnt just appear out of thin air the FTC doesnt look around and say, That looks suspicious. Generally a lawsuit or formal complaint is brought to their attention and the practices described by it imply that regulations are being ignored. PDF 2023169 United States of America Before the Federal Trade Commission Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts. The FTC filed a complaint against BetterHelp that led to a $7.8 million settlement and an order banning the them from sharing consumers' health data with third parties. will vigorously enforce the laws we are charged with administering, even in this new market, she wrote in a guest essay in The New York Times in May. Its settlement was announced on Aug. 13, 1998, and in hindsight, it was even more groundbreaking than it already seemed at the time: GeoCities told users it would not share optionally inputted information with third partiesincluding education level, income, marital status, occupation, and interestsbut did so anyway. OpenAI also has to turn over details about how many people were affected by the March security incident and information about all the steps it took to respond. Track enforcement and policy developments from the Commissions open meetings. The agency also asked OpenAI to describe how it refines its models to address their tendency to hallucinate, making up answers when the models dont know the answer to a question. When OpenAI released ChatGPT in November, it instantly captured the publics imagination with its ability to answer questions, write poetry and riff on almost any topic. Thats Just the Beginning. ), Can AI commit libel? Congress, meanwhile, has stalled on passing comprehensive federal privacy legislation. That was the case with Microsoft, a console maker, and Activision, a video game maker. Recently, the FTC has also brought more attention to data brokerscompanies engaged in the highly invasive and harmful practice of collecting, selling, and sharing Americans data. Stipulated orders have the force of law when approved and signed by the District Court judge. doesnt have the staff with technical expertise to evaluate the responses they will get and to see how OpenAI may try to shade the truth, she said. The Federal Trade Commission ("FTC"or "Commission"), having reason to believe that BetterHelp, Inc., a corporation, has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Amazon Duped Millions of Consumers, According to the Government. After all, the FTCs recent casesranging from companies indefinitely keeping childrens voice recordings to companies lying to their customers and secretly sharing health dataare just the tip of the iceberg. Chatbots, which are also being deployed by companies like Google and Microsoft, represent a major shift in the way computer software is built and used. The probe into the Microsoft Corp.-backed startup marks the first official inquiry into a technology that has the potential to change almost every aspect of peoples lives and has become almost equally fascinating for its potential to run awry. filed to appeal the court decision on Microsofts deal with Activision. Find the resources you need to understand how consumer protection law impacts your business. At the hearing, the court loss this week provided more ammunition for Republicans in their complaints against the F.T.C. For questions about compliance with Section 5 of the FTC Act or other data privacy and protection issues, contact the authors or any of their colleagues in Arnold & Porters Privacy, Cybersecurity & Data Strategy practice group. Slate is published by The Slate Mr. Jordan, who has accused Democrats of censoring Republican views, has praised Twitters owner, Elon Musk, for loosening restrictions on speech. This blog post is intended to be a general summary of the law and does not constitute legal advice. The US Federal Trade Commission has opened an investigation into OpenAI Inc., questioning whether its popular ChatGPT conversational AI bot puts consumers' reputations and data at risk . The online counseling service BetterHelp has agreed to return $7.8 million to customers to settle with the FTC for sharing health data it had promised to keep private including information about mental health challenges with companies including Facebook and Snapchat. On March 2, 2023, the Federal Trade Commission (FTC) issued a proposed consent order with BetterHelp, Inc. (BetterHelp), an online counseling service, for allegedly misrepresenting its privacy practices and sharing information about consumers' interest in or use of mental health counseling services (which the FTC alleges to be sensitive health i. The FTCs demands of OpenAI are the first indication of how it intends to enforce those warnings. This site uses cookies to enhance functionality and performance. The F.T.C.s investigation into OpenAI can take many months, and it is unclear if it will lead to any action from the agency. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. The change is part of the Commissions efforts to ensure that consumers not only are protected when using mobile devices, and have easy access to consumer information, but also can inform the FTC of complaints. In New York, an Upper East Side enclave is fighting city plans for curbside 5G towers, calling them "garish" and unnecessary, in a campaign that . While lying to their customers to keep them from withdrawing their cryptocurrency deposits, Leon, Goldstein, and Mashinsky protected themselves by withdrawing significant sums of cryptocurrency from Celsius two months before the company filed for bankruptcy. A US appeals court denied a Federal Trade Commission bid to pause Microsoft Corp. 's acquisition of Activision Blizzard Inc. Friday, clearing a path . Iran Brings Back Morality Police Patrol to Enforce Hijab Law, Former BNY Mellon Executive Says He Was Fired for Aiding Friends Complaint, US-China Climate Talks Reopen With Pledge to Take Big Steps, Ancient Silk Road Art Faces Risks From Climate Change in China. No One Is Sure What to Do. models and treats personal data, and said the company should provide the agency with documents and details. The FTC enters complaints into Consumer . The Federal Trade Commission building in Washington is pictured on Jan. 28, 2015. They are poised to reinvent internet search engines like Google Search and Bing, talking digital assistants like Alexa and Siri, and email services like Gmail and Outlook. New Bitcoin ETFs Now? 3:20. Have a confidential tip for our reporters? DEbrief@ftc.gov or by overnight courier (not the U.S. In its complaint, the FTC asserted that these alleged misrepresentations amounted to violations of Section 5 of the FTC Act, which broadly prohibits unfair and deceptive practices harmful to consumers. The FTC declined to comment, noting that its investigations are nonpublic. kworthman@ftc.gov . Blog: Cryptocurrency deposits with no returns, What To Know About Cryptocurrency and Scams, Blog:Crypto platform Celsius feels the heat from FTC lawsuit alleging unfair and deceptive practices, John Newman & Amy Ritchie, Bureau of Competition, Staff in the Bureau of Competition & Office of Technology, Company falsely claimed it had more than enough assets to satisfy customer obligations days before the company filed for bankruptcy, FTC says, Competition and Consumer Protection Guidance Documents, Celsius touted a new business model but engaged in an old-fashioned swindle,. The company only provided the highest returns to those who enrolled in its loyalty program and invested in a handful of lesser-known cryptocurrencies, and gave most participants far less than promised. BetterHelp to return $7.8M to customers in FTC settlement - Fortune Unfortunately, I expect that today you will be the target of a barrage of personal attacks and wild accusations about the work of the F.T.C. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. life savings, college funds, and money saved for retirement. Tech is not your friend. The Federal Trade Commission voted Thursday to ban Teladoc Health-owned online mental health counseling service BetterHelp from sharing consumers' sensitive data for advertising. We had previously written about an FTC proposed consent order that would prohibit a company from perpetual retention of personal health information. The European Union is also expected to pass AI legislation by the end of the year. said Samuel Levine, Director of the FTCs Bureau of Consumer Protection. BetterHelp and the FTC have reached a settlement in regard to BetterHelp's advertising practices that were in effect between 2017 to 2020. Also this week, it opened an investigation into the artificial intelligence start-up OpenAI, which makes the ChatGPT chatbot, for potentially harming consumers with privacy and security lapses and for spreading false information about individuals. Although the FTC did not allege that BetterHelp shared customers medical records per se, the FTC alleged that BetterHelp uploaded personal health information in the form of the email addresses of all of its current and former clients to Facebook, so that Facebook could identify similarly situated consumers and target them with advertisements for BetterHelps mental health services which allegedly brought tens of thousands of new customers and millions of dollars of revenue to the company.