New York AI Disclosure Law Faces First Test as Consumers Raise Complaints Over Synthetic Performers

A landmark New York law requiring advertisers to disclose their use of synthetic performers is generating the first consumer complaints, putting policymakers’ latest efforts to mitigate some of the potential negative effects of AI to an early test, Bloomberg Law reported.

 

The measure, known as the synthetic performer disclosure law, took effect in June and requires companies to state explicitly when AI-generated “synthetic performers” are used in advertising.

 

Consumers cannot sue companies directly and must rely on the state attorney general to enforce the law against offenders who use models that look human but were created using AI. The office said it is already hearing complaints from citizens.

 

The law is one of the first attempts to counter what lawmakers see as consumer deception surrounding the use of AI in marketing. How New York enforces the law will likely inform how other states looking to move forward with similar measures proceed.

 

The disclosure law was passed alongside another measure, the Fashion Workers Act, which requires advertisers and modelling agencies to obtain written consent for computer-generated or AI-enhanced representations of a model’s likeness, said Barry Benjamin, a partner at Venable LLP. That law aims in part to protect models’ right of publicity — their ability to control the use of their image and likeness, he said.

 

But attorneys for the advertising industry question the synthetic performer disclosure law’s scope and purpose, as well as whether it can effectively combat consumer deception given its notable exceptions.

 

“It’s not immediately obvious that there’s harm or the possibility of being deceived in a way that matters simply based on the fact that somebody appears real when they’re not,” said Robert Freund of Robert Freund Law APC. “I’m not sure that just the disclosure that ‘hey, this is an AI person’ or not gives the consumer additional information about whether or not something is an ad.”

 

Still, as AI marketing tools proliferate in the influencer marketing ecosystem, such regulations may take on greater urgency as entirely AI-generated personas rack up followers.

 

Human influencers already create an illusion of authenticity because many advertisements appear to show a person giving customers their honest thoughts when, in reality, they are reading from a script, Freund noted.

 

AI-generated user content is “another way to fake authenticity, it’s just much easier to do now at scale,” he said.

 

AI-Driven Deception

 

There is a longstanding tradition of “making sure consumers have the right to know when they’re being advertised to,” Benjamin said.

 

Advertisers will use AI tools because they make creating material much less expensive, he said. New York simply requires them to say explicitly whether people appearing in advertisements are AI-generated.

 

“There are real risks around deception and misinformation that AI really exacerbates,” said Samantha Rothaus, a partner at Davis + Gilbert LLP. “But I don’t know that AI is unique necessarily when we’re talking about advertising that’s not 100% authentic.”

 

Rothaus also sees several weaknesses in the New York law that appear to undercut its purpose, including carve-outs for audio and AI-generated voices.

 

“That’s really weird, especially for an interest in trying to help protect the jobs of performers, because voice-over performers are performers too,” she said.

 

The law also does not specify at what point an image needs a disclosure, making compliance tricky, she said. If an advertisement shows a person’s leg but not their full body, or an image contains a crowd in the background, it is not clear whether a disclosure is required.

 

“There’s so much questioning I get from clients about at what point does it matter, at what point is it material,” Rothaus said.

 

Rise of Influencers

 

Despite these difficulties, synthetic performer disclosure laws could become especially salient as AI tools drive a proliferation of content in the influencer marketing sector.

 

As image and video generation software improves, AI influencer personas are emerging online and stoking fears over political influence. Concerns over how AI can blur the line between fiction and reality are probably also driving synthetic disclosure laws, Rothaus said.

 

Social media influencer marketing is already rife with advertisements that do not comply with state advertising laws and Federal Trade Commission requirements, Freund said.

 

“You can go on any social media platform right now and do a little bit of scrolling and you will probably find one or more undisclosed ads,” he said. “What these new tools allow is the creation of a much higher volume of content more cheaply, and so by virtue of that, you can expect there will be more noncompliance.”

 

Marketers now have many tools enabling them to create synthetic performers inexpensively and at greater scale, Freund said.

 

Rothaus said influencers are always supposed to disclose if they are being paid to promote something.

 

But now, “if you’re an influencer and you’re not even a real person, that’s even more material,” she said. “When the whole thing is fictional, and you’re not aware that it’s fictional, that’s where people really can get misled and taken down the wrong path.”

 

Further Regulation

 

Other states and jurisdictions are still moving ahead with their own AI disclosure laws despite the potential limitations.

 

Hawaii enacted a measure nearly identical to New York’s in July, while California’s legislature passed a synthetic performer disclosure law at the end of August that is now on Governor Gavin Newsom’s desk.

 

The EU AI Act’s transparency requirements, which include watermarks on AI-generated or altered content so synthetic content can be detected, as well as disclosures that media may have been artificially generated or manipulated, also took effect in August.

 

“The writing is on the wall in terms of more of these regulations leaning toward disclose, disclose, disclose,” Rothaus said.