Source: Federal Trade Commission

Federal Trade Commission has announced the reopening and setting aside of a final order against Rytr LLC, a provider of AI-driven writing assistance tools. This decision comes as a direct response to the Trump administration’s newly released AI Action Plan, which advocates for a more permissive regulatory environment for AI developers. The original order, finalized earlier in the year, had penalized Rytr for allegedly providing tools that could be easily used to generate deceptive consumer reviews, thereby violating Section 5 of the FTC Act.

In its reconsideration, the Commission noted that the new executive policy emphasizes avoiding "regulatory overreach" that could hinder the growth of the American AI sector. By setting aside the order, the FTC is signaling a shift away from strict preventative enforcement in favor of a framework that prioritizes economic competitiveness. This move has sparked internal debate within the Commission, with some commissioners expressing concern that the retraction weakens protections against AI-enabled fraud and consumer deception.

The case represents one of the first concrete examples of how the administration's broader AI policy is being integrated into agency-level enforcement actions. It highlights a transition from viewing AI as a tool for potential harm to treating it as a strategic asset that requires regulatory flexibility. Companies in the generative AI space are closely watching these developments, as the setting aside of the Rytr order suggests a significant reduction in federal scrutiny for AI tools that could be misused by third parties.