AI firms not exempt from existing US laws, says former FTC chair Lina Khan

Former US Federal Trade Commission (FTC) chair Lina Khan has said that artificial intelligence companies and their top executives are not shielded from laws already in force in the United States, and that regulators can act against them when they release dangerous, untested or defective products.

Writing on social media platform X, Khan argued that the debate over creating dedicated AI regulations should not pull attention away from enforcing the rules that already exist. She said law enforcers already have the authority to charge companies and their chief executives over products that are dangerous, unvetted or faulty, and that there is no AI exemption from laws already on the books.

Khan pointed to consumer protection law as one route for action. In her view, releasing flawed AI tools without adequate measures to detect and stop rogue or defective AI agents can amount to an unfair or deceptive act or practice under the FTC Act and similar state laws.

She also said some state attorneys general are already examining whether AI companies and their executives could face criminal liability when their models are tied to criminal activity.

On competition, Khan said existing prohibitions on unfair methods of competition could apply when AI companies use commercially sensitive information belonging to their customers, including data gathered by tracking how those customers use different tools. She described the AI industry as highly concentrated and interconnected, creating risks and conflicts of interest, and said federal and state authorities should scrutinise partnerships and cross-investments across the sector. Such opaque relationships and interdependencies, she added, could undermine accountability.

Khan flagged cybersecurity as another area of concern, saying companies should reinforce basic security protections as AI tools change the threat landscape. Businesses that fail to invest in adequate data security or to address known vulnerabilities could also be breaching existing laws, she said. She noted that during her time at the FTC, the agency acted against companies over weak data security practices and held chief executives personally liable where they were responsible.

Looking ahead, Khan said policymakers weighing new AI-specific rules should learn from earlier efforts to regulate sectors such as banking, networks, platforms and utilities. Tools such as structural separation, nondiscrimination requirements and supervision could have a role in future AI regulation, she said. Even so, she stressed that any new AI rules should develop alongside enforcement of the laws that already apply to companies and their executives.