Utah’s AI Consumer Transparency Law

Background:

On March 13, 2024, the Governor of Utah, Spencer Cox signed the Utah Artificial Intelligence Policy Act (“AI Consumer Transparency Law”) into law. The AI Consumer Transparency Law took effect on May 1, 2024.

The AI Consumer Transparency Law amends the Utah Consumer Sales Practices Act. Amongst other things, the AI Consumer Transparency Law covers transparency requirements for consumer-facing generative artificial intelligence tool (“GAI”), liability for violations of consumer protection laws caused by GAI, and the establishment of the Utah Office of AI Policy (which is granted rulemaking authority).

The AI Consumer Transparency Law defines “Generative Artificial Intelligence” as any artificial system that: (a) is trained on data; (b) interacts with a person using text, audio, or visual communication; and (c) generates non‑scripted outputs similar to outputs created by a human, with limited or no human oversight.^[1]

Scope and Impact:

Summary:

As explained in further detail below, the AI Consumer Transparency Law:

• makes persons or entities responsible for the deceptive use of GAI;
• requires a person in a regulated occupation to disclose to recipients of its services that such recipients are interacting with GAI;
• provides a safe harbor for those seeking to develop and test AI technology;
• creates the Office of Artificial Intelligence Policy and a regulatory AI analysis program;
• establishes the Artificial Intelligence Learning Laboratory Program to assess technologies, risks, and policy; and
• grants the office rulemaking authority over AI programs and regulatory exemptions.^[2]

Responsibility for GAI:

The AI Consumer Transparency Law makes suppliers in connection with deceptive acts or practices in connection with a consumer transaction.

The AI Consumer Transparency Law expressly clarifies that the use of GAI is not a defense to any violation of the prohibition in the Utah Consumer Sales Practices Act against deceptive acts or practices by suppliers in connection with consumer transactions.^[3] More specifically, an actor may be found guilty of a violation of the Utah Consumer Sales Practices Act if the actor commits the offense with the aid of GAI, or the actor intentionally prompts or otherwise causes GAI to commit the offense^.[4]

Disclosure Requirements:

The AI Consumer Transparency Law contains the following two disclosure requirements:

• a person who uses, prompts, or otherwise causes GAI to interact with a person in connection with any act administered and enforced by the Utah Division of Consumer Protection (e.g. consumer sales, telemarketing, charitable solicitations, and other activities involving consumers in Utah), shall clearly and conspicuously disclose to the person with whom the GAI interacts, if asked or prompted by the person, that the person is interacting with GAI and not a human;^[5] and

• a person who provides the services of a regulated occupation (e.g., accountants, architects, social workers, doctors, and other healthcare professionals) shall prominently disclose when a person is interacting with a GAI in the provision of regulated services.^[6]

However, the AI Consumer Transparency Law does not provide any guidance as to what information should be included in these disclosures, and whether these disclosures are required more than once per person.

Fines and Penalties:

A failure to disclose in accordance with the requirements of the AI Consumer Transparency Law may result in administrative fines of up to $2,500 and a civil penalty of up to $5,000 per violation.^[7] The Division of Consumer Protection may also seek an injunction, or request that the court award costs, order disgorgement, or provide other relief. The AI Consumer Transparency Law does not provide any private right of action.^[8]

Safe Harbor:

To foster innovation and the development of AI in Utah, the AI Consumer Transparency Law provides a framework by developers seeking to test their AI in Utah may apply for, and receive the benefit of, a regulatory safe harbor provision (referred to in the AI Consumer Transparency Law as “regulatory mitigation”).^[9] To be eligible for protection by the safe harbor provision, the AI Consumer Transparency Law includes a variety of requirements that those seeking such protection must demonstrate compliance with.^[10] Generally, the benefits of the AI must outweigh the risks arising from decreased regulatory oversight.

Next Steps:

If you are likely to fall subject to the AI Consumer Transparency Law, you should consider:

• identifying any consumer-facing GAI used in connection with your business;
• implementing automated mechanisms within your GAI to ensure compliance with disclosure requirements;
• whether you are eligible for protection by the safe harbor provision in the AI Consumer Transparency Law and, if so, applying with the advice of legal counsel; and
• closely monitoring the regulatory landscape for any further developments.

Broader Context of U.S. AI Regulation:

Utah is not alone in the regulation of AI in the U.S.

Tennessee recently passed the Ensuring Likeness Voice and Image Security (ELVIS) Act, becoming the first U.S. state to protect songwriters, performers and music industry professionals from the unauthorized replication of an individual’s voice through the use of artificial intelligence (AI). You can read more about the ELVIS Act in an earlier A&O Shearman on Tech blog post here.

The Governor of Colorado, Jared Polis recently signed Senate Bill 24-205, “Concerning Consumer Productions in Interactions with Artificial Intelligence Systems” (“AI Anti-Discrimination Act”) into law. In doing so, Colorado created a mandatory regulatory framework for developers and deployers of “high-risk AI systems” to mitigate consumer harm and “algorithmic discrimination.” You can read more about the AI Anti-Discrimination Act in an earlier A&O Shearman on Tech blog post here.

We expect other U.S. states to follow suit.

Stay tuned for more.

Footnotes

[1] AI Consumer Transparency Law, Section 13-2-12(1)(a).

[2] AI Consumer Transparency Law, Highlighted Provisions.

[3] AI Consumer Transparency Law, Section 13-2-12(2).

[4] AI Consumer Transparency Law, Section 12, Section 76-2-107.

[5] AI Consumer Transparency Law, Section 13-2-12(3).

[6] AI Consumer Transparency Law, Section 13-2-12(4)(a).

[7] AI Consumer Transparency Law, Section 13-2-12(7)-(10).

[8] AI Consumer Transparency Law, Section 13-2-12(8).

[9] AI Consumer Transparency Law, Section 13-70-101.

[10] AI Consumer Transparency Law, Section 13-70-303.