FTC Impacts US Privacy Legislation

The Federal Trade Commission's increasing privacy enforcement activity is a significant indicator of the shifting landscape of US privacy legislation, as regulators continue to bring claims under Section 5 of the FTC Act, highlighting the importance of transparency in data practices, as noted by the International Association of Privacy Professionals. This trend is particularly relevant in the context of recent settlements, such as the Labcorp settlement of $14.5M Medicare false claims, which demonstrates the consequences of deceptive statements or material omissions about data practices. The FTC's actions suggest that companies can no longer afford to be opaque about their data collection and usage, and that a new era of accountability is emerging, one that may have far-reaching implications for companies like Meta, which is currently in talks for an AI compute deal, and Apple, which is negotiating a settlement with the DOJ over antitrust claims. As the FTC continues to crack down on companies that prioritize profits over consumer privacy, it is likely that US privacy legislation will become increasingly stringent, ultimately benefiting consumers but posing significant challenges for companies that have not prioritized transparency and accountability in their data practices. The enforcement landscape is varied, with a significant jump in the enforcement of comprehensive consumer privacy laws, and regulators are focusing on issues such as the selling or sharing of personal data, especially for targeted advertising, and ensuring that opt-out mechanisms work and consumer rights are protected. Regulators are also leveraging existing consumer protection laws to enjoin and penalize practices harmful to children and teenagers, and the Federal Trade Commission has announced settlements concerning deceptive AI claims, particularly focusing on whether businesses are misrepresenting the capabilities of their products. With 23 state comprehensive consumer privacy laws enacted and dozens of sectoral laws, the pace of legislation shows no signs of abating, and 2026 has already seen four new comprehensive privacy laws enacted, indicating a shift in the center of gravity in the state privacy landscape towards enforcement activities.