AI Enforcement Action Tracker

The primary federal agencies enforcing AI-related laws are the Federal Trade Commission (FTC) under Section 5 of the FTC Act for deceptive practices and algorithmic harm, the Equal Employment Opportunity Commission (EEOC) for AI-driven hiring discrimination under Title VII and the ADA, the Consumer Financial Protection Bureau (CFPB) for algorithmic credit decisions under ECOA and FCRA, and the Department of Health and Human Services Office for Civil Rights (HHS/OCR) for AI in healthcare programs receiving federal funding.

State Attorneys General are also increasingly active, particularly following the enactment of state-level AI laws in Colorado, Texas, Illinois, and New York City. The NYC Department of Consumer and Worker Protection is the most active local enforcement body, pursuing employers under Local Law 144 on automated hiring tools.

In December 2023, the FTC took action against Rite Aid over its use of AI-powered facial recognition technology deployed in over 200 store locations. The FTC found the system generated false-positive matches at a disproportionately high rate for women and people of color, resulting in wrongful accusations and public humiliations of innocent customers.

Rite Aid was banned from using facial recognition technology in retail settings for five years and required to delete all biometric data and model training data collected through the program. Critically, the FTC found Rite Aid had failed to implement adequate testing, accuracy thresholds, or human review processes before deployment — failures that aggravated the outcome. This case established a clear precedent: companies deploying AI surveillance systems must conduct pre-deployment testing and implement ongoing accuracy monitoring.

New York City Local Law 144, effective July 5, 2023, requires employers using automated employment decision tools (AEDTs) in hiring or promotion decisions to: (1) commission annual independent bias audits by a qualified third party, (2) publicly post the audit results on their website, and (3) notify candidates or employees that such tools are being used at least 10 business days before use.

Enforcement is handled by the NYC Department of Consumer and Worker Protection (DCWP). Penalties range from $500 to $1,500 per violation per day. As of 2024, the DCWP issued subpoenas to non-compliant employers and reached at least two public settlements requiring retroactive audits and corrective disclosures. Large employers in financial services and technology are under particular scrutiny. Expanded rules covering a broader range of tools are under regulatory review in 2025.

Yes. Both the EEOC and the FTC have made clear that purchasing an AI tool from a vendor does not transfer legal liability to that vendor. The EEOC's 2023 technical assistance document explicitly states that employers are responsible under Title VII, the ADA, and the ADEA for discriminatory outcomes from third-party AI tools they deploy in employment decisions.

This means organizations must conduct due diligence on AI tools before deployment, including reviewing bias audit results, testing on their own applicant populations where feasible, and establishing contractual obligations for vendors to provide ongoing audit data. Relying solely on vendor representations about AI accuracy or fairness is not a defense in enforcement proceedings. Consult qualified employment counsel before deploying AI tools in any employment context.

The FTC treats inflated or unsubstantiated AI capability claims as deceptive acts under Section 5 of the FTC Act, applying the same standard as any other product performance claim: claims must be truthful, not misleading, and supported by competent and reliable evidence before they are made.

This includes claims about AI accuracy rates, detection capabilities, error rates, fairness, or safety that cannot be independently verified through competent testing. The FTC's 2024 action against Evolv Technology — whose AI weapons detection system was marketed with accuracy claims the company could not substantiate — is the clearest illustration. Importantly, the FTC has also signaled it will target "AI-washing": marketing AI-based products that are not actually powered by meaningful AI, or that perform substantially below marketed specifications. Any company making AI capability claims should maintain a substantiation file with the testing evidence supporting those claims before publication.