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Abstract

As recommendation algorithms and generative artificial intelligence become central to digital platforms, the Federal Trade Commission has, in the past, increasingly signaled its intent to regulate emerging technologies under Section 5 authority to prevent unfair or deceptive acts or practices. This paper examines how companies may face Federal Trade Commission scrutiny when algorithmic design, personalization systems, or public representations result in consumer harm. Drawing on case studies involving TikTok, Facebook, Snapchat, and others, the paper explores the limitations of plaintiff litigation under Section 230 of the Communications Decency Act and examines this potential avenue of expanding federal administrative enforcement. It further argues that algorithmic opacity, behavioral manipulation, and misleading public messaging regarding platforms, safety, personalization, or ethics may expose companies to legal liability under Section 5 of the FTC Act. This paper explains that platforms and companies must align their internal practices with their public facing claims to avoid enforcement risk and protect consumer trust, which will allow space for further innovation in the generative artificial intelligence space, algorithm design, and emerging technologies.

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