FTC Rules on AI in Advertising

The starting point for U.S. advertising is the claim consumers are likely to take away and the evidence that supports it. The FTC’s business guidance says claims about AI tools need substantiation; a company should not overstate what its system can do or use “AI” as a label that implies capabilities it has not shown. The FTC’s finalized 2025 DoNotPay order illustrates an enforcement outcome: the company was prohibited from advertising that its service performs like a real lawyer without sufficient evidence. A case and order are specific to their facts and do not create a categorical ban on AI advertising. Other rules can apply to the content and method of advertising. The FTC’s Consumer Reviews and Testimonials Rule, effective October 21, 2024, prohibits specified fake or false reviews and testimonials, including those generated by AI, as well as certain review suppression and undisclosed insider reviews. The FTC Endorsement Guides and general advertising principles also matter where an ad uses endorsements or testimonials. A disclosure does not make a false performance claim true, and a synthetic spokesperson does not by itself resolve whether viewers are misled. Evaluate the net impression, the source of the endorsement, any material connection, and whether the claim is supported. Do not summarize this as “there is no AI advertising law” or imply that a single statute covers every AI ad. Federal and state rules can address particular practices, and legal status may change. The practical workflow is to inventory express and implied claims, document reliable evidence before publication, test important limitations and performance across relevant conditions, identify generated or incentivized testimonials, and review applicable disclosure and review rules. This guide is a plain-language overview of FTC materials, not legal advice; current official sources should be checked for the product and campaign at issue.