USA Law and Practice Contributed by: Katelyn Patton, Frankfurt Kurnit Klein & Selz
a performer’s work unless the intended uses are reasonably specific and the performer has legal or union representation. • The New York Fashion Workers Act requires sepa - rate, explicit written consent from models for the creation or use of their digital replicas, distinct from representation agreements – with state Department of Labor guidance defining “digital replica” and how consent must be obtained. 8.2 AI-Related Claims The FTC has issued some guidance specific to the use of AI-related claims in advertising, including the following. • Do not over-promise what an algorithm or AI-based tool can deliver, including by claiming that it can do something beyond the current capability of any AI or automated technology. • Do not make baseless claims that a product is AI- enabled. • Consider the reasonably foreseeable risks arising from the use of AI tools (including ways in which tools can be misused or cause other harm) and take all reasonable precautions before the AI prod - uct hits the market. 8.3 Chatbots At the federal level, the FTC has recently sharpened its focus on chatbots, including launching an inquiry in September 2025 into AI chatbots marketed as “companions”, focusing on whether such tools may mislead consumers, exploit vulnerable populations, or collect and use sensitive data in unfair or decep - tive ways. This action reflects the agency’s broader scrutiny of AI-driven products, particularly where emotional manipulation, privacy risks or unsupported performance claims could harm consumers. At the state level, legislatures are beginning to address chatbot transparency more directly. California’s Bot Disclosure Law (effective since 2019) requires clear disclosure when a bot is used in online commercial communications to mislead someone about its artifi - cial nature in order to spur a purchase. Other states, including New York, have introduced pending bills that would impose similar disclosure obligations in both commercial and political contexts – signalling a broad -
er trend towards regulating when and how consumers must be told they are interacting with a chatbot rather than a human. 9. Web 3.0 9.1 Cryptocurrency and Non-Fungible Tokens (NFTs) General advertising principles should also generally apply to the marketing and sale of cryptocurrency and non-fungible tokens (NFTs). Marketers must be careful to avoid misleading claims about NFTs, as the value of such digital assets is subject to extreme volatility and may be adversely impacted by ‒ among other things ‒ a decline in public interest, a change in law, regulation or policy, and technical issues. The FTC is also particularly concerned that, when consumers buy these digital products, they may not understand what they are buying and it is not always clear what they actually own or control. Therefore, FTC guidance suggests that – when offering digital products – companies should ensure that customers understand the material terms and conditions, includ - ing whether they are purchasing an item or simply obtaining a licence to use it. Section 17 (b) – the so-called anti-touting provision – of the Federal Securities Act 1933 also makes it unlawful for any person to publish, give publicity to or circulate any advertisement, among other commu - nications, describing a security for a consideration received (or to be received) unless the advertisement fully discloses the receipt and amount of considera - tion. If a digital asset is considered a security, those rules may apply as well. The SEC continues to follow through on repeated warnings that it will aggressively enforce Section 17 (b) of the Securities Act against influencers, includ - ing mainstream celebrities, who fail to disclose the nature, scope and amount of compensation received in exchange for their sponsored posts promoting these products. The recent Brown v Dolce & Gabbana USA Inc case underscores the reputational and legal risks that
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