Key Takeaways
• FTC Commissioner Melissa Holyoak called for a predictable and flexible regulatory environment for artificial intelligence.
• Holyoak stated that while the FTC will continue to combat AI-driven fraud and deception, enforcement must not stifle innovation.
• She warned that misguided or overly aggressive regulation could harm competition and technological progress.
• The remarks reflect an ongoing effort to balance consumer protection with the need for innovation in emerging AI markets.
As artificial intelligence (AI) continues to redefine industries, Federal Trade Commission (FTC) Commissioner Melissa Holyoak emphasized the need for a regulatory framework that supports both innovation and consumer safeguards.
Speaking on Tuesday, Holyoak called for a predictable and flexible regulatory space that avoids stifling competition or halting the progress of AI technologies.
Ensuring Accountability While Encouraging Innovation
Holyoak made clear that the FTC is not stepping away from its enforcement role, especially in protecting consumers from deceptive practices powered by AI. However, she cautioned against enforcement that could backfire by curbing legitimate technological advancements.
“The Federal Trade Commission won’t stop policing fraud and deception powered by artificial intelligence, but flexibility is needed to avoid ‘misguided enforcement actions or excessive regulation’ that could stifle innovation and competition in the emerging field,” said Commissioner Melissa Holyoak.
Her comments come at a time when government agencies, tech firms, and civil society are intensely debating how best to regulate AI without impeding its growth potential.
The Case for Regulatory Predictability
One of Holyoak’s central arguments was the importance of regulatory predictability. Businesses working on AI systems need clear, stable rules to make long-term investments in ethical innovation.
• Predictable rules help companies assess compliance risks early and design responsible AI products.
• Flexibility in enforcement ensures regulators can keep pace with emerging technologies.
• Overregulation may deter smaller firms from participating in AI development, reducing market diversity.
By fostering a consistent regulatory landscape, the FTC could prevent the uncertainty that often stalls innovation—especially among startups and smaller companies with fewer legal resources.
Continued Focus on AI-Driven Misconduct
Holyoak reaffirmed the FTC’s commitment to policing unethical or illegal applications of AI. This includes:
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Deceptive AI-powered marketing or user engagement tools
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Algorithmic decision-making that results in discrimination or privacy violations
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Misuse of generative AI technologies to produce misleading content or deepfakes
The agency’s stance reflects its broader mission to protect consumers while adapting to new technological realities.
Broader Policy and Industry Context
Holyoak’s remarks enter a global policy conversation about how best to govern AI. In the absence of a unified federal AI law in the U.S., agencies like the FTC play a leading role in case-by-case enforcement and regulatory signaling.
Her statement aligns with efforts by international regulators and U.S. lawmakers to strike a balance between innovation and accountability.
Current developments shaping the landscape include:
• The European Union’s AI Act, which proposes tiered risk-based regulation
• Increased inter-agency collaboration under the U.S. National AI Initiative
• Rising use of AI tools across legal, financial, healthcare, and advertising sectors
Holyoak’s approach may serve as a foundation for broader rulemaking efforts, including potential guidance or frameworks developed in collaboration with industry and academic stakeholders.
Commissioner Holyoak’s address provides insight into how the FTC views its role in the age of artificial intelligence: as a protector of consumers, yes, but also as a partner in progress.
Her call for regulatory predictability and flexibility reflects a mature recognition that heavy-handed oversight could slow innovation and limit the competitive benefits AI can offer.
By advocating for balance—between enforcement and encouragement, between rules and room to grow—the FTC is signaling its readiness to guide the next phase of AI development in a way that supports both public trust and technological leadership.
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