Sponsors (6)
The bill increases transparency and accountability for AI outputs influenced by paid promotions—giving users clearer disclosures and legal remedies—while imposing ongoing compliance costs, litigation exposure, and design constraints on providers that could raise prices or limit services.
Consumers gain clearer, real-time transparency and control: AI outputs that are influenced by paid promotions must be labeled and users can ask in-session whether a response was subject to a commercial arrangement so they can distinguish ads from organic answers.
Consumers benefit from new enforcement: the FTC is empowered to adopt rules and enforce against deceptive AI advertising practices, creating deterrence against hidden sponsorships.
Harmed users have stronger remedies: a private right of action plus state attorney general authority lets injured individuals seek damages or injunctive relief when commercial influence is undisclosed, increasing accountability.
Large covered providers (those with >50,000 monthly users) must build and maintain a real-time registry and disclosure systems, imposing ongoing compliance costs that may be passed to users or result in reduced features.
Providers face heightened litigation risk and statutory damages (up to $1,000 per violation, tripled for willful violations), which could incentivize conservative product changes or market withdrawal that reduce available services.
Broad definitions and private-rights provisions create compliance uncertainty for smaller operators near the 50,000-user threshold, complicating business planning and potentially chilling entry or innovation.
Based on analysis of 2 sections of legislative text.
Requires AI tools to disclose when outputs are influenced by paid promotions, sponsorships, affiliates, or third-party-provided prompts/tuning, and creates an FTC-enforced disclosure and registry regime.
Official title: To require a covered tool to disclose when the covered tool provides sponsored content, and for other purposes.
Introduced August 24, 2026 by Seth Magaziner · Last progress August 24, 2026
Requires providers of AI tools to clearly disclose when AI outputs are influenced by commercial relationships. The bill mandates visible, plain-language labels for paid promotions, affiliate links, sponsored content, third-party-provided prompts or tuning data, and other commercial influences, plus an internal registry and user query capability about commercial influence. Directs the Federal Trade Commission to write implementing rules within 180 days and every three years thereafter, and treats violations as unfair or deceptive practices enforceable under existing FTC authority.