Last month, the Federal Trade Commission (“FTC”) finalized a new rule prohibiting the impersonation of government and business entities.  That same day, the FTC sought comment on a supplemental notice of proposed rulemaking (“SNPRM”) to expand the rule to prohibit the impersonation of individuals and to extend liability to parties who provide the means and instrumentalities to create unlawful impersonations.  The FTC cited concerns about AI-generated deepfakes as its rationale for these actions.  FTC Chair Lina Khan stated that the proposed expansions would strengthen “the FTC’s toolkit to address AI-enabled scams impersonating individuals.”

The new rule makes “the impersonation of government, businesses, and their officials or agents in interstate commerce” an unfair or deceptive act or practice.  The rule prohibits “materially and falsely” posing as or “materially misrepresenting” affiliation with a government entity or business or its officers.  The FTC also noted that the rule would allow for civil penalties under 15 U.S.C. 45(m)(1)(A), which allows the FTC to seek civil penalties against entities that violate an FTC rule “with actual knowledge or knowledge fairly implied on the basis of objective circumstances.”  Penalties for such actions are capped at $10,000 per violation.

The SNPRM seeks comment on the FTC’s proposal to expand the newly adopted rule to prohibit impersonating individuals and to extend liability for violations of the rule to parties who “provide goods and services with knowledge or reason to know that these goods or services will be used in” unlawful impersonations.  The FTC stated that expanding the rule to cover individuals would allow the FTC to provide remedies for relationship-based scams, such as those in which bad actors pretend to be a consumer’s relative in need of money or concoct false romantic relationships to extract money or information.  The FTC stated that the proposed means and instrumentalities provision would protect consumers from parties who knew or had reason to know that their goods and services would be used for rule-violating impersonations. 

The new rule will take effect on April 1, 2024.  The comment period on the SNPRM is open until April 30, 2024.

Photo of Yaron Dori Yaron Dori

Yaron Dori has over 25 years of experience advising technology, telecommunications, media, life sciences, and other types of companies on their most pressing business challenges. He is a former chair of the firm’s technology, communications and media practices and currently serves on the…

Yaron Dori has over 25 years of experience advising technology, telecommunications, media, life sciences, and other types of companies on their most pressing business challenges. He is a former chair of the firm’s technology, communications and media practices and currently serves on the firm’s eight-person Management Committee.

Yaron’s practice advises clients on strategic planning, policy development, transactions, investigations and enforcement, and regulatory compliance.

Early in his career, Yaron advised telecommunications companies and investors on regulatory policy and frameworks that led to the development of broadband networks. When those networks became bidirectional and enabled companies to collect consumer data, he advised those companies on their data privacy and consumer protection obligations. Today, as new technologies such as Artificial Intelligence (AI) are being used to enhance the applications and services offered by such companies, he advises them on associated legal and regulatory obligations and risks. It is this varied background – which tracks the evolution of the technology industry – that enables Yaron to provide clients with a holistic, 360-degree view of technology policy, regulation, compliance, and enforcement.

Yaron represents clients before federal regulatory agencies—including the Federal Communications Commission (FCC), the Federal Trade Commission (FTC), and the Department of Commerce (DOC)—and the U.S. Congress in connection with a range of issues under the Communications Act, the Federal Trade Commission Act, and similar statutes. He also represents clients on state regulatory and enforcement matters, including those that pertain to telecommunications, data privacy, and consumer protection regulation. His deep experience in each of these areas enables him to advise clients on a wide range of technology regulations and key business issues in which these areas intersect.

With respect to technology and telecommunications matters, Yaron advises clients on a broad range of business, policy and consumer-facing issues, including:

  • Artificial Intelligence and the Internet of Things;
  • Broadband deployment and regulation;
  • IP-enabled applications, services and content;
  • Section 230 and digital safety considerations;
  • Equipment and device authorization procedures;
  • The Communications Assistance for Law Enforcement Act (CALEA);
  • Customer Proprietary Network Information (CPNI) requirements;
  • The Cable Privacy Act
  • Net Neutrality; and
  • Local competition, universal service, and intercarrier compensation.

Yaron also has extensive experience in structuring transactions and securing regulatory approvals at both the federal and state levels for mergers, asset acquisitions and similar transactions involving large and small FCC and state communication licensees.

With respect to privacy and consumer protection matters, Yaron advises clients on a range of business, strategic, policy and compliance issues, including those that pertain to:

  • The FTC Act and related agency guidance and regulations;
  • State privacy laws, such as the California Consumer Privacy Act (CCPA) and California Privacy Rights Act, the Colorado Privacy Act, the Connecticut Data Privacy Act, the Virginia Consumer Data Protection Act, and the Utah Consumer Privacy Act;
  • The Electronic Communications Privacy Act (ECPA);
  • Location-based services that use WiFi, beacons or similar technologies;
  • Digital advertising practices, including native advertising and endorsements and testimonials; and
  • The application of federal and state telemarketing, commercial fax, and other consumer protection laws, such as the Telephone Consumer Protection Act (TCPA), to voice, text, and video transmissions.

Yaron also has experience advising companies on congressional, FCC, FTC and state attorney general investigations into various consumer protection and communications matters, including those pertaining to social media influencers, digital disclosures, product discontinuance, and advertising claims.

Photo of Andrew Longhi Andrew Longhi

Andrew Longhi is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity and Technology and Communications Regulation Practice Groups.

Andrew advises clients on a broad range of privacy and cybersecurity issues, including compliance obligations, commercial…

Andrew Longhi is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity and Technology and Communications Regulation Practice Groups.

Andrew advises clients on a broad range of privacy and cybersecurity issues, including compliance obligations, commercial transactions involving personal information and cybersecurity risk, and responses to regulatory inquiries.

Andrew is Admitted to the Bar under DC App. R. 46-A (Emergency Examination Waiver); Practice Supervised by DC Bar members.

Photo of Conor Kane Conor Kane

Conor Kane advises clients on a broad range of privacy, artificial intelligence, telecommunications, and emerging technology matters. He assists clients with complying with state privacy laws, developing AI governance structures, and engaging with the Federal Communications Commission.

Before joining Covington, Conor worked in…

Conor Kane advises clients on a broad range of privacy, artificial intelligence, telecommunications, and emerging technology matters. He assists clients with complying with state privacy laws, developing AI governance structures, and engaging with the Federal Communications Commission.

Before joining Covington, Conor worked in digital advertising helping teams develop large consumer data collection and analytics platforms. He uses this experience to advise clients on matters related to digital advertising and advertising technology.