FTC Vacates Rytr AI Order, Signaling Shift Under Trump Administration’s AI Policy

Key Takeaways

• FTC Reversal: The Commission reopened and vacated its 2024 final consent order against Rytr, finding the underlying complaint legally insufficient.
• AI Policy Influence: The decision was tied directly to the Trump Administration’s AI Executive Order and America’s AI Action Plan.
• Innovation Concerns: Regulators concluded that the blanket ban on AI-generated reviews imposed an undue burden on AI development.
• Enforcement Narrowed, Not Abandoned: The FTC reiterated that it will still pursue AI-driven fraud and deceptive practices where tangible consumer harm exists.
• Order Vacated With Consent: Rytr agreed to vacate the order and waived procedural rights, clearing the way for the reversal.

Deep Dive

The Federal Trade Commission has moved to reopen and set aside a 2024 final consent order against AI writing company Rytr, concluding that the original enforcement action failed to meet the legal standards of the FTC Act and imposed unnecessary constraints on artificial intelligence innovation.

In an order issued on December 22, the Commission said its review was conducted in light of the Trump Administration’s Artificial Intelligence Executive Order and America’s AI Action Plan, both of which call for regulators to avoid restricting emerging technologies absent clear evidence of consumer harm.

The original consent order stemmed from allegations that Rytr’s AI-powered writing assistant could be used by subscribers to generate false or deceptive online reviews. While the case was settled without an admission of wrongdoing, the final order went further, barring Rytr from offering any AI-enabled service capable of generating consumer or customer reviews or testimonials.

Following its reassessment, the FTC determined that the complaint’s factual allegations did not adequately support a violation of Section 5 of the FTC Act. The Commission also found that banning an entire category of AI-enabled functionality, rather than targeting specific deceptive conduct, went beyond what the law requires and risked chilling innovation in a fast-developing sector.

“Condemning a technology or service simply because it potentially could be used in a problematic manner is inconsistent with the law and ordered liberty,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. He added that the Trump-Vance FTC is focused on encouraging innovation in strategically important industries, while directing enforcement toward cases involving concrete consumer harm.

The agency was careful to note that the decision does not represent a pullback from AI enforcement more broadly. The FTC said it will continue to pursue companies and individuals that use AI tools to deceive consumers or misrepresent the capabilities of generative AI systems. In Rytr’s case, however, the Commission concluded that the record did not support such findings.

Rytr consented to vacating the order and waived its rights under Rule 3.72(b) of the Commission’s Rules of Practice, allowing the FTC to formally set aside the settlement.

The move underscores how the Trump Administration’s AI policy framework is beginning to reshape federal enforcement, particularly where regulators conclude that precautionary restrictions on AI tools have outpaced evidence of real-world consumer harm.

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