Source: JD Supra

JD Supra reports on an unusual move by the Federal Trade Commission (FTC) to reopen and vacate a previously finalized consent order against Rytr LLC, a provider of AI-powered writing tools. The original enforcement action, initiated in 2024, alleged that Rytr’s tool could be used to generate deceptive consumer reviews, violating the FTC Act. However, on January 2, 2026, the Commission voted 2–0 to set aside the order, concluding that the original complaint did not adequately plead a violation and that the remedy was not supported by sufficient evidence of actual consumer harm.

The decision was heavily influenced by a new executive order from the Trump administration, which directs federal agencies to review prior actions that may unnecessarily burden AI innovation. The Commission noted that the previous order effectively barred entire categories of AI functionality despite the existence of legitimate uses. This reversal signals a policy shift toward grounding enforcement in demonstrable harms rather than potential misuse by third parties. The FTC reaffirmed that while it retains authority to protect consumers, its actions must be proportionate and supported by the factual record to ensure American leadership in the global AI sector.