The R U REAL Act: Regulating AI in Mobile Marketing
Congresswoman Jan Schakowsky (D. Ill.), the Democrat’s Chief Deputy Whip and Ranking Member of the House Innovation, Data, and Commerce Subcommittee, has introduced new legislation that, if adopted, would regulate the use of Artificial Intelligence (AI) in telemarketing calls and text messages. The "Restrictions on Utilizing Realistic Electronic Artificial Language Act" (“R U REAL Act”) was introduced on the same day that Congressman Palone introduced proposed amendments to the Telephone Consumer Protection Act (TCPA) in an effort to overrule the Supreme Court’s decision in Facebook v. Duguid and represents a collective effort to expand federal regulation over telemarketing. The R U REAL ACT has been referred to the House Energy and Commerce Committee where Pallone is currently the Ranking Member and would be poised to reclaim the gavel if Democrats regain control of the House in November’s elections.
Understanding the Act:
The R U REAL Act proposes two key changes:
Disclosure Requirement: Telemarketers using AI to emulate humans in calls or texts must disclose this fact at the beginning of the call or text message
Increased Penalties: Violations involving AI impersonation with malicious intent will face doubled penalties under the Federal Trade Commission Act.
If passed, the bill has potential implications for ecommerce companies, including:
Lack of clarity: As currently drafted, the bill does not make clear what it means to “emulate a human being” when sending messages. Further, as currently drafted, the bill states that a disclosure must occur “at the beginning of such call or text message”, which can be read to imply that a disclosure is required for each text message, not simply at the time of opt-in (as the TCPA requires) or at the beginning of a conversation. These types of ambiguities will likely require clarification through rulemaking or will produce costly litigation as parties dispute the intent of the legislation.
Chatbots and AI-powered assistants: Businesses using such tools for customer service or marketing communication might need to implement disclosure mechanisms if those tools have the ability to send text messages, which is defined to include SMS, MMS, or Rich Communication service (RCS).
Personalized marketing campaigns: The development and implementation of AI-driven personalization techniques for two-way SMS conversations could be disrupted or face adoption hurdles if consumers are turned off by the mandatory disclosure requirements.
Increased Costs for Businesses and Consumers: To the extent the disclosures are to be required on each text message, such disclosures could prove disruptive in practice, given the character limitations of text messages. Implementing repetitive disclosures would also increase costs for both the companies that send text messages and the consumers who receive them as more messages would be required to convey the information the brand desires to share with its customers.
What's Next?
The R U REAL Act is currently under review by the House Energy and Commerce Committee. Further modifications and debates are likely before any potential passage. EcMA will continue to monitor the developments and advocate for regulations that prioritize both consumer protection and the responsible development of mobile commerce technologies.
As EcMA advocates for responsible innovation and consumer protection, we support initiatives that promote transparency and combat deceptive practices. However, we also maintain that responsible regulations should avoid hindering innovation that might create an environment in which businesses cannot enjoy the cost savings that can be attained by the legitimate and beneficial applications of AI in ecommerce. We also don’t believe that rules should be adopted that needlessly increase costs for consumers that desire to communicate with their favorite brands by text messaging. As such, any disclosure requirement should be carefully written to avoid the need for repetitive disclosures.
