[Federal Register Volume 89, Number 189 (Monday, September 30, 2024)]
[Notices]
[Pages 79594-79596]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22400]


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FEDERAL TRADE COMMISSION

[File No. 232 3042]


DoNotPay, Inc..; Analysis of Proposed Consent Order To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices. The attached Analysis of Proposed Consent Order to Aid 
Public Comment describes both the allegations in the complaint and the 
terms of the consent order--embodied in the consent agreement--that 
would settle these allegations.

DATES: Comments must be received on or before October 30, 2024.

ADDRESSES: Interested parties may file comments online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write ``DoNotPay, Inc.; 
File No. 232 3042'' on your comment and file your comment online at 
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, please mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex 
D), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Keith Fentonmiller (202-326-2775), 
Attorney, Division of Advertising Practices, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec.  2.34, 16 CFR 
2.34, notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of 30 days. The following 
Analysis to Aid Public Comment describes the terms of the consent 
agreement and the allegations in the complaint. An electronic copy of 
the full text of the consent agreement package can be obtained at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before October 30, 
2024. Write ``DoNotPay, Inc.; File No. 232 3042'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the https://www.regulations.gov website.
    Because of heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We strongly encourage you to 
submit your comments online through the https://www.regulations.gov 
website. If you prefer to file your comment on paper, write ``DoNotPay, 
Inc.; File No. 232 3042'' on your comment and on the envelope, and mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex 
D), Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else's Social Security 
number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.  
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule Sec.  4.9(c). In 
particular, the written request for confidential treatment that 
accompanies the comment must include the factual and legal basis for 
the request and must identify the specific portions of the comment to 
be withheld from the public record. See FTC Rule Sec.  4.9(c). Your 
comment will be kept confidential only if the General Counsel grants 
your request in accordance with the law and the public interest. Once 
your comment has been posted on the https://www.regulations.gov 
website--as legally required by FTC Rule Sec.  4.9(b)--we cannot redact 
or remove your comment from that website, unless you submit a 
confidentiality request that meets the requirements for such treatment 
under FTC Rule Sec.  4.9(c), and the General Counsel grants that 
request.
    Visit the FTC website at https://www.ftc.gov to read this document 
and the news release describing the proposed settlement. The FTC Act 
and other laws the Commission administers permit the collection of 
public comments to consider and use in this proceeding, as appropriate. 
The Commission will consider all timely and responsive public comments 
it receives on or before October 30, 2024. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an agreement containing a consent order from 
DoNotPay, Inc. (``DoNotPay'').
    The proposed consent order (``proposed order'') has been placed on 
the public record for thirty days for receipt of comments by interested 
persons. Comments received during this period will become part of the 
public record. After thirty days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    This matter involves DoNotPay's reliance on the emergence of new 
technology like artificial intelligence

[[Page 79595]]

(AI) to market its DoNotPay Service (``the Service'') as a cutting-edge 
solution for producing legal documents. DoNotPay described its Service 
as ``the world's first robot lawyer'' and as an ``AI lawyer'' capable 
of performing legal services such as drafting ``ironclad'' demand 
letters, contracts, complaints for small claims court; challenging 
speeding tickets; and appealing parking tickets. The proposed complaint 
alleges that the Service was not designed to operate like a human 
lawyer, and that the company's claims were false, misleading, or 
unsubstantiated.
    The proposed complaint also alleges that DoNotPay falsely claimed 
that the Service used artificial intelligence and other technology to 
analyze a consumer's small business website for federal and state law 
violations and could save a consumer hundreds of thousands of dollars 
in potential legal fees. Further, the proposed complaint alleges that 
DoNotPay falsely claimed that the General Membership subscription to 
the DoNotPay Service included some features that, in fact, were not 
available to General Membership subscribers.
    The proposed order contains provisions designed to prevent DoNotPay 
from engaging in these and similar acts and practices in the future. 
Provision I prohibits DoNotPay from representing that its Service or 
any other internet-enabled product or service that it offers operates 
like a human lawyer or any other type of professional, unless that 
representation is not misleading and DoNotPay possesses competent and 
reliable evidence to substantiate the representation. Provision II 
prohibits DoNotPay from misrepresenting that its Service or any other 
internet-enabled product or service is capable of analyzing or 
evaluating a website or any other document for federal and state law 
violations or will save consumers legal fees. This provision also 
prohibits misrepresentations about the features, benefits, or 
attributes included with the purchase of, or subscription to, any such 
product or service.
    Provisions III requires DoNotPay to pay the Commission $193,000 in 
monetary relief. Provision IV describes the procedures and legal rights 
related to that payment. Provision V requires DoNotPay to provide the 
Commission customer contact information upon request in order to 
administer consumer redress. Provision VI requires DoNotPay to provide 
eligible customers with notice of the consent order and the settlement.
    Provisions VII through XI are reporting and compliance provisions. 
Provision VII mandates that DoNotPay acknowledge receipt of the order, 
distribute the order to principals, officers, and certain employees and 
agents, and obtain signed acknowledgements from them. Provision VIII 
requires DoNotPay to submit compliance reports to the Commission one 
year after the order's issuance and submit notifications when certain 
events occur. Under Provision IX, DoNotPay must create certain records 
for 10 years and retain them for five years. Provision X requires 
DoNotPay to provide information or documents necessary for the 
Commission to monitor compliance with the order during the period of 
the order's effective dates. Finally, Provision XI provides the 
effective dates of the order, including that, with exceptions, the 
order will terminate in 20 years.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the complaint or proposed order, or to modify in any 
way the proposed order's terms.

    By direction of the Commission.
Joel Christie,
Acting Secretary.

Concurring Statement of Commissioner Melissa Holyoak, Joined by Chair 
Lina M. Khan

    The Commission votes today to accept for public comment an 
administrative complaint and consent agreement with DoNotPay, Inc., 
resolving allegations that the company made false and unsubstantiated 
claims that its artificial intelligence (``AI'')-powered service could 
function like a human lawyer; that its service could analyze a business 
website for law violations based solely on the business's email 
address; and that some legal services were available as part of its 
general membership when in fact they were not.
    For consumers to benefit from AI (as with any technology), they 
must be able to trust the claims that companies make about its 
capabilities. Importantly, this settlement does not suggest that 
consumers should use expensive professional services, or that companies 
should avoid offering innovative products that reduce the need for 
high-priced lawyers.\1\ The misdeeds of a few bad apples shouldn't 
dampen pro-consumer innovation. Indeed, we are hopeful that AI will 
give consumers access to many types of services at lower cost and with 
greater convenience than has previously been available. Today's 
settlement shows the Commission's important role in eliminating 
deception from the market so that honest firms can compete to offer 
consumers innovative, trustworthy products.
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    \1\ Cf. Sandbox Information for Interested Applicants, Utah 
Office of Legal Services Innovation, https://utahinnovationoffice.org/info-for-interested-applicants/ (last 
visited Sept. 12, 2024) (describing Utah's ``legal regulatory 
sandbox,'' which ``enables authorized entities to employ innovative 
legal service methods and business models . . . to ensure consumers 
have access to a well-developed, high-quality, innovative, 
affordable and competitive market for legal services'').
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Concurring Statement of Commissioner Andrew N. Ferguson

    The Commission today issues an administrative complaint and accepts 
a proposed consent agreement with DoNotPay for deceptively marketing a 
generative artificial intelligence (AI) system.\1\ The Commission's 
complaint alleges that DoNotPay advertised its service as ``the world's 
first robot lawyer'' that could ``fight corporations, beat bureaucracy 
and sue anyone at the press of a button.'' \2\ DoNotPay told consumers 
it could ``Generate Perfectly Valid Legal Documents in No Time'' and 
guide consumers through filing a lawsuit.\3\ The DoNotPay website 
prominently featured a quote that it claimed was from the Los Angeles 
Times: ``What this robot lawyer can do is astonishingly similar--if not 
more--to what human lawyers do.'' \4\ But this quote was actually from 
a high-school student's opinion piece in the High School Insider 
website, a blog hosted by the Los Angeles Times for young people.\5\ 
DoNotPay told consumers that ``[w]hile it is possible to handle suing 
for assault on your own, it may not be the best approach'' and advised 
them that ``it is easier to have the expertise of an entity such as 
DoNotPay on your side to avoid complications.'' \6\ The Commission's 
complaint alleges that DoNotPay fell far short of these promises, and 
that DoNotPay employees had not even tested the quality and accuracy of 
the legal documents and advice generated by the service.\7\ In some 
cases, the Commission alleges that DoNotPay advertised features that it 
simply did not provide.\8\
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    \1\ In re DoNotPay, Inc., Complaint (``Complaint'') & Decision 
and Order.
    \2\ Complaint ] 9.
    \3\ Id. ] 17.
    \4\ Id. ] 10.
    \5\ Id. ] 11.
    \6\ Id. ] 17.
    \7\ Id. ] 20.
    \8\ Id. ] 24.
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    I am happy to vote for this complaint. It is a great example of the 
Commission enforcing Section 5 of the Federal Trade

[[Page 79596]]

Commission Act \9\ against businesses that deceive consumers about the 
capabilities of their generative AI services. Businesses that exploit 
media hype and consumer unfamiliarity with this new technology to cheat 
people out of their hard-earned money should expect a knock on the door 
from the Commission and other law-enforcement agencies. In this case, 
consumers who relied on DoNotPay's wholly inadequate legal advice not 
only wasted their money but were also likely induced into reliance on 
the inadequate legal contracts and ineffective legal filings generated 
by DoNotPay. It does not take a vivid imagination to imagine how such 
reliance could have ruinous consequences. The Commission's staff 
deserves great credit for bringing and settling this case.
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    \9\ 15 U.S.C. 45.
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    I write separately to ensure that no one confuses what we are doing 
today--holding generative-AI companies to the same standards for 
honest-business conduct that apply to every industry--with the 
regulation of AI qua AI. Congress has given us the power to enforce 
prohibitions against unfair methods of competition and unfair or 
deceptive acts and practices.\10\ We may reach some AI-related activity 
incidental to enforcing those prohibitions, as we do today. But 
Congress has not given us power to regulate AI standing alone. We 
should not succumb to the panicked calls for the Commission to act as 
the country's comprehensive AI regulator.\11\
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    \10\ Id. 45(a)(2).
    \11\ See Dissenting Statement of Commissioner Andrew N. 
Ferguson, Joined by Commissioner Melissa Holyoak, In the Matter of 
Rytr LLC, at 9-10 (Sept. 25, 2024); Concurring and Dissenting 
Statement of Commissioner Andrew N. Ferguson, A Look Behind the 
Screens: Examining the Data Practices of Social Media and Video 
Streaming Services, at 10-11 (Sept. 19, 2024).
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    I write also to clarify that my vote should not be taken as support 
for the State Bar of California's claim that DoNotPay was engaged in 
the unauthorized practice of law.\12\ The Commission does not enforce 
state occupational-licensing laws like California's unauthorized-
practice-of-law prohibition.\13\ And if a company were to create a 
computer system capable of giving accurate legal advice and drafting 
effective legal documents, or honestly advertise a system that provides 
something less, I doubt that the aggressive enforcement of lawyers' 
monopoly on legal services would serve the public interest.
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    \12\ Complaint ]] 25-27.
    \13\ See Cal. Bus. & Prof. Code Sec.  6125.

[FR Doc. 2024-22400 Filed 9-27-24; 8:45 am]
BILLING CODE 6750-01-P