On November 21, 2023, the Federal Trade Commission (FTC) approved a resolution allowing it to use “compulsory process in nonpublic investigations involving certain products and services that use or claim to be produced using artificial intelligence (AI) or claim to detect its use.” This allows the FTC to issue civil investigative demands in investigations relating to AI. 

What You Need to Know:

• The FTC approved a resolution allowing itself to issue civil investigative demands (CIDs) to further nonpublic investigations of company’s use of AI. 
• CIDs are administrative subpoenas that allow the FTC to seek a variety of information related to its investigation, including documents, responses to written questions, and depositions. 
• The FTC intends to use this power in advancing its investigations into the potential effects of company’s use of artificial intelligence with respect to antitrust law and consumer protection law. 

Civil investigative demands, often referred to as CIDs, are a form of administrative subpoena that provide the FTC with its primary means of obtaining information when investigating companies or products. CIDs are not self-enforcing, and while the FTC cannot penalize a company for not complying with the CID, it can go to court to obtain an order to enforce the CID. The FTC can issue CIDs to obtain documentary evidence, responses to specific questions, or to depose individuals or companies. 

The FTC has jurisdiction to investigate violations of antitrust laws and consumer protection laws, and appears to be interested in investigating the use of and effect of AI in both of these areas. In its press release announcing this resolution, the FTC noted that: “Although AI, including generative AI, offers many beneficial uses, it can also be used to engage in fraud, deception, infringements on privacy, and other unfair practices, which may violate the FTC Act and other laws. At the same time, AI can raise competition issues in a variety of ways, including if one of just a few companies control the essential inputs or technologies that underpin AI.”