HR-10146-119
Referred to the House Committee on Energy and Commerce.
Sponsored by Seth Magaziner (D-RI)
What it does
This bill would require operators of large AI chatbots and generative search tools (those with more than 50,000 monthly active users) to clearly disclose when a response is influenced by a paid or commercial arrangement, such as sponsored product mentions, affiliate links, or paid data sources. It would ban AI systems from denying they are AI or hiding commercial relationships when directly asked, and it would let the FTC, state attorneys general, and individual users sue for violations.
Who benefits
Consumers who use AI chatbots and AI-powered search tools for recommendations or advice, who would gain clearer information about paid influence on the answers they receive; consumer protection advocates; the FTC and state attorneys general, who gain new enforcement tools; and plaintiffs' attorneys, who could bring private lawsuits with statutory damages and fee-shifting.
Who is hurt
AI companies and search engines with large user bases, which would bear compliance costs for building disclosure systems, maintaining real-time commercial-arrangement registries, and responding to litigation; advertisers and brands that pay for placement in AI responses, who would face new transparency requirements affecting how they structure sponsorship deals; smaller AI firms near the 50,000-user threshold, which may face compliance burdens as they scale; and companies that could face statutory damages of up to $1,000 per violation (tripled for willful conduct) even absent proof of actual harm.
Supporters argue
Supporters argue that as AI chatbots increasingly replace traditional search and advice-seeking, users have no way to know whether a recommendation reflects genuine information or a hidden paid arrangement, echoing long-standing FTC disclosure rules for influencers and native advertising. They contend the bill simply extends existing truth-in-advertising principles to a new medium, preventing deceptive practices before they become entrenched as AI tools reach hundreds of millions of users.
Opponents argue
Opponents argue the bill's broad definitions of "commercial arrangement" and "sponsored content" could sweep in ordinary training data licensing or partnerships unrelated to deceptive advertising, creating compliance uncertainty for a fast-evolving technology. They contend the private right of action with statutory damages up to $1,000 per violation, combined with parallel state enforcement, invites costly litigation and inconsistent state-by-state standards that could slow AI innovation without a clear showing of consumer harm.
Constitutional context
Congress's authority rests on the Commerce Clause power to regulate interstate commercial activity, and the FTC's rulemaking under the FTC Act's unfair-or-deceptive-practices standard has long been upheld as regulating commercial speech, which receives reduced First Amendment protection under Central Hudson Gas & Electric v. Public Service Commission (1980). Post-Loper Bright, courts would independently review whether the FTC's implementing regulations stay within the bill's statutory bounds rather than deferring to the agency's interpretation.
Checks and balances
Congress directs the FTC to write implementing rules within 180 days and every three years thereafter, while courts retain independent authority to review those rules post-Loper Bright, and both state attorneys general and private plaintiffs can independently enforce the law, checking FTC inaction.
Historical precedent
The FTC has long required disclosure of paid endorsements and native advertising under its Endorsement Guides and unfair-or-deceptive-practices authority, and this bill extends a similar disclosure framework to AI-generated content.