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AI (and other) Companies: Quietly Changing Your Terms of Service Could Be Unfair or Deceptive

Mar 04, 2024 - ftc.gov
The article discusses the conflict of interest tech companies face between using user data to fuel AI product development and respecting privacy commitments. Companies may be tempted to change their privacy policies to use customer data more freely, but they risk legal consequences if they renege on privacy commitments. The Federal Trade Commission (FTC) has a history of challenging deceptive practices related to privacy policies, such as companies sharing consumer data with third parties without consent.

The article emphasizes that a business cannot unilaterally change its privacy commitments after collecting user data. The FTC will continue to take action against companies that engage in unfair or deceptive practices, including those that secretly rewrite their privacy policies to use consumer data for product development. The article concludes by stating that there's nothing intelligent about obtaining artificial consent.

Key takeaways:

  • Companies developing AI products have a continuous need for data, often sourced from their own userbases, but must balance this with privacy and data security policies.
  • Companies may be tempted to change their privacy policies to use customer data more freely, but doing so surreptitiously could lead to legal issues.
  • The FTC has a history of challenging deceptive practices related to changes in a company's privacy policy, citing examples such as Gateway Learning Corporation and a genetic testing company.
  • The FTC will continue to take action against companies that engage in unfair or deceptive practices, including those that change their privacy policies or terms of service without proper notification or consent from users.
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