Regulation vs. Innovation: Generative AI Legal Concerns

1. Regulation vs. Innovation: Generative AI Legal Concerns

By: Samantha Rothaus and Andrew Richman

While generative AI’s meteoric rise was the hot button issue for 2023, it is sure to remain a key focus across the advertising industry in 2024. The coming year is likely to bring more clarity to the many legal concerns raised by this technology, along with more attempts to regulate it.

Many of the lawsuits filed against generative AI companies early last year have advanced to more substantive litigation stages. Several courts are expected to issue decisions this year addressing whether the unauthorized online scraping of information for use as training data constitutes a copyright infringement, and whether this practice could be considered a fair use.

The U.S. Copyright Office (USCO) is also expected to provide greater clarity this year on its stance regarding generative AI’s impact on copyright law. Last summer, the USCO undertook an initiative to study generative AI in detail and issued a notice of inquiry (NOI) focusing on, among other things, the legal status and eligibility for copyright protection of AI-generated materials and the legality of using copyrighted works to train generative AI models. Its conclusions from the NOI are anticipated to be issued in 2024, which will help guide the courts and legislative efforts to address copyright infringement issues.

In the coming year, the Federal Trade Commission is also expected to target its enforcement efforts against the use of generative AI in a manner that may mislead or deceive consumers or constitute unfair competition. In addition, the Biden administration’s executive order on AI issued last fall called for more transparency and new standards for labeling AI-generated material to disclose to consumers when AI is being used in communications. Government agencies will be working in 2024 to develop regulations around these new standards and disclosure practices, which could be adopted within private industry. On a legislative level, there are several state and federal proposals pending that seek to address concerns raised by generative AI, but it remains to be seen whether any will be passed into law this year and what impact such legislation would have on marketing practices.

While this year will likely bring greater clarity and uniformity to the use of generative AI within the advertising, marketing and communications sector, marketers and agencies should still continue to closely monitor the way their organizations use generative AI technologies, ensuring that inputs remain generic while strongly vetting all output that is created using these tools.