FTC investigating OpenAI for possible ‘reputational harm’ caused by ChatGPT

The agency is investigating whether the company engaged in unfair or deceptive practices that resulted in “reputational harm” to consumers, according to a letter obtained by the Washington Post. 
In this photo illustration, the home page for the OpenAI "ChatGPT" app is displayed on a laptop screen. (Photo by Leon Neal/Getty Images)

The Federal Trade Commission has reportedly opened an investigation into OpenAI, the maker of popular AI tool ChatGPT, on claims the chatbot has harmed consumers through its data collection and false results on individuals, according to an FTC demand.

The FTC earlier this week sent a 20-page request for records about how OpenAI addresses risks related to its AI models. The agency is investigating whether the company engaged in unfair or deceptive practices that resulted in “reputational harm” to consumers, according to the letter, which was reported by the Washington Post. 

The FTC called on OpenAI to provide detailed accounts of all consumer complaints it had received regarding ChatGPT making “false, misleading, disparaging or harmful” statements about individuals.

Since OpenAI released it, ChatGPT has astounded users, writing short college essays, cover letters, and a weirdly passable Seinfeld scene in which Jerry needs to learn the bubble sort algorithm.


If the FTC finds that a company has violated consumer protection laws, it can fine the company or require it to follow a consent decree dictating how the company handles data. In the past few years, the FTC has emerged as the federal government’s top cop of Big Tech companies like Meta, Amazon and Twitter, levying large fines against the tech giants for alleged violations of consumer protection laws related to their respective platforms.

The investigation comes at a time when demand for ChatGPT is exploding within Congressional offices and generative AI pilot programs similar to ChatGPT are popping up in all corners of the federal government and many industries across the private sector. 

The State Department, the National Science Foundation, the Justice Department and the Department of Veterans Affairs have all announced generative AI related pilot projects or research initiatives in the past few months.

OpenAI and the FTC didn’t immediately respond to requests for comment.

Nihal Krishan

Written by Nihal Krishan

Nihal Krishan is a technology reporter for FedScoop. He came to the publication from The Washington Examiner where he was a Big Tech Reporter, and previously covered the tech industry at Mother Jones and Global Competition Review. In addition to tech policy, he has also covered national politics with a focus on the economy and campaign finance. His work has been published in the Boston Globe, USA TODAY, HuffPost, and the Arizona Republic, and he has appeared on NPR, SiriusXM, and PBS Arizona. Krishan is a graduate of Arizona State University’s Walter Cronkite School for Journalism. You can reach him at

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