FTC: Racially Biased AI Violates FTC Act

April 20, 2021

The FTC announced Monday that the sale or use of racially biased algorithms is an unfair and deceptive trade practice in violation of the FTC Act. In a blog post, the Commission warned companies to ensure fairness and equity in their use of AI. The FTC cautioned companies to "Start with the right foundation," "Watch out for discriminatory outcomes," "Embrace transparency and independence," "Don't exaggerate what your algorithm can do or whether it can deliver fair or unbiased results," "Tell the truth about how you use data," "Do more good than harm," and "Hold yourself accountable–or be ready for the FTC to do it for you." The FTC cited its 2016 report on big data analytics and machine learning; its 2018 hearing on algorithms, AI and predictive analytics; and its 2020 business guidance on AI and algorithms. The post also cited a recent study from the Journal of the American Medical Informatics Association finding that AI may worsen healthcare disparities for people of color, even if an AI system was meant to benefit all patients. In 2019, EPIC filed a complaint with the FTC asking the Commission to investigate HireVue's use of opaque, unproven AI and to require baseline protections for AI use. Last year, EPIC petitioned the FTC to conduct a rulemaking on commercial uses of AI, including protections against discrimination and unfair bias.

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