This week, the Federal Trade Commission (FTC) issued a proposed order requiring Workado, a company specializing in artificial intelligence (AI) detection tools, to stop advertising the accuracy of its AI detection tools unless it has suitable evidence that the detection tools are as accurate as claimed. The proposed settlement is yet another indication of the FTC’s continued emphasis on tackling deceptive AI technology under a new administration.
The complaint alleged that Workado marketed its AI Content Detector as being “98 percent” accurate when detecting whether text was written by AI or humans, but the complaint alleged that in reality, the accuracy rate was much lower. The complaint also alleges the AI detection tool was trained and built in such a way as to effectively analyze only academic content, rather than all of the various forms of marketing content Workado customers were submitting, thus making the 98% claim impossible. When independent testing was conducted, measuring the tool against various forms of marketing media, the accuracy rate dropped to just 53%.
Under the proposed order, Workado would be prohibited from making any representations about the effectiveness of its AI detection tool unless it had competent and reliable evidence or competent and reliable scientific evidence to support the claim. Workado is also required to email its customers about the consent order and settlement with the Commission.
The FTC voted 3-0 to issue the administrative complaint and to accept the consent agreement. The proposed order is not yet final, and it will be posted to the Federal Register and subject to public comment for 30 days. The agency will then decide whether to finalize the proposed order or make any changes. The case is just the latest example of the FTC continuing to send somewhat mixed signals on the prioritization of AI regulation.
In January, Commissioner Melissa Holyoak spoke at GCR Live: Law Leaders Global 2025. In her remarks, she stated the FTC’s focus “should be on stopping fraudulent conduct and developing further our understanding of this industry, not seeking to stretch our statutory authorities. She reiterated this position on April 22at the Association of Privacy Professionals annual conference, stating that “the commission will promote AI growth and innovation, not hamper it with misguided enforcement actions or excessive regulation.”
However, the Workado proposed order and recent FTC consent orders indicate that AI will not receive any special protection when it comes to deceptive conduct.
The mixed signals from the FTC underscore a growing tension and uncertainty surrounding the regulation of AI technologies. While the FTC is clearly willing to take action against deceptive claims in the AI industry, its broader regulatory philosophy remains in flux, oscillating between calls for restraint and actions that suggest a more aggressive posture.
As AI continues to rapidly evolve, advertisers must remain vigilant and take careful note of ongoing regulatory actions in order to minimize compliance risks while regulators attempt to balance fostering innovation with protecting consumers.
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