FTC Signals Pause on AI Regulation
On January 27, 2026, the Federal Trade Commission (FTC) signaled a shift in its regulatory approach towards artificial intelligence. During the Privacy State of the Union Conference held in Washington, DC, FTC Bureau of Consumer Protection Director Chris Mufarrige stated that there is “no appetite for anything AI-related” in the agency’s current rulemaking pipeline. This statement comes alongside the announcement of other rule ideas in development by the FTC.
This change in stance follows the FTC’s decision in December 2025 to revisit a 2024 consent order involving the AI writing assistant Rytr. This order had previously barred Rytr from providing AI-enabled services that were alleged to assist users in writing false or misleading product reviews.
Deregulatory Shift in AI Oversight
The FTC’s reduced interest in regulating AI aligns with the broader deregulatory stance of the current federal administration. This approach emphasizes removing barriers to innovation, rather than expanding regulations. Mufarrige pointed to President Trump’s AI Action Plan as a rationale for re-evaluating the Rytr matter, highlighting a preference for rolling back rules that hinder AI development.
Furthermore, Mufarrige indicated that the Commission will adopt a more “sparing” rulemaking approach compared to the Biden-era FTC. This suggests a potential reliance on selective enforcement priorities and existing legal authorities, rather than initiating new AI-specific regulations.
Ongoing Commitment to Privacy Enforcement
Despite the reduction in focus on AI regulation, the FTC remains committed to privacy enforcement. Mufarrige emphasized that protecting children’s privacy online will play a significant role in the agency’s enforcement agenda for the upcoming year. The focus will particularly be on how age verification interacts with the Children’s Online Privacy Protection Act (COPPA), addressing any tensions that might arise between the two.
The FTC’s recent track record regarding COPPA reflects a consistent theme of ensuring that parents have control over their children’s data. For instance, a recent settlement of $10 million with Walt Disney Co. underscores the agency’s commitment to these privacy protections.
As the landscape of AI continues to evolve, the FTC’s regulatory posture will be closely watched, particularly in the context of innovation and consumer protection.
