# FTC Proposes AI Accuracy Policy Targeting Hidden Steering of AI Systems

> The Federal Trade Commission is floating a policy that would treat secretly steering an AI's outputs as a potential violation of federal consumer-protection law. Under Section 5 of the FTC Act, the proposal targets companies that quietly nudge a model toward undisclosed goals, such as a particular ideological slant or commercial outcome, without telling users it is happening. The commission's line is nuanced. Hallucinations on their own would not count as deception, since everyone knows these systems get things wrong. But misrepresenting how likely a model is to be accurate, or hiding that its answers are being shaped toward a hidden agenda, could cross into illegal conduct. Any disclosure, the FTC says, must be clear and prominent in the interface, not buried in terms of service. The comment period just closed, and the proposal already collides with a revised Colorado AI law, hinting at the state-versus-federal tangle ahead. The bigger idea is worth watching: regulators are starting to treat an AI's hidden instructions and system prompts as material facts that users have a right to know about.

_Section: [Daily AI Updates](https://www.wortins.com/daily-ai) · Source: Spencer Fane LLP · Published Saturday, August 1, 2026_

## Wortins' read

The Federal Trade Commission is floating a policy that would treat secretly steering an AI's outputs as a potential violation of federal consumer-protection law. Under Section 5 of the FTC Act, the proposal targets companies that quietly nudge a model toward undisclosed goals, such as a particular ideological slant or commercial outcome, without telling users it is happening. The commission's line is nuanced. Hallucinations on their own would not count as deception, since everyone knows these systems get things wrong. But misrepresenting how likely a model is to be accurate, or hiding that its answers are being shaped toward a hidden agenda, could cross into illegal conduct. Any disclosure, the FTC says, must be clear and prominent in the interface, not buried in terms of service. The comment period just closed, and the proposal already collides with a revised Colorado AI law, hinting at the state-versus-federal tangle ahead. The bigger idea is worth watching: regulators are starting to treat an AI's hidden instructions and system prompts as material facts that users have a right to know about.

## Source

[Read the full story at Spencer Fane LLP](https://www.spencerfane.com/insight/ftc-proposes-new-policy-on-ai-accuracy-hiding-how-an-ai-system-is-steered-may-violate-federal-law/)

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