FTC Reopens and Vacates Rytr Consent Order, Signaling Major AI Regulatory Shift

In a major regulatory pivot on December 22, 2025, the Federal Trade Commission (FTC) reopened and set aside its 2024 final consent order against AI writing assistant Rytr LLC. Under the leadership of Chairman Andrew Ferguson, the Commission declared that the original complaint failed to support violations of Section 5 of the FTC Act, arguing that the previous order had placed an undue burden on artificial intelligence innovation.

The original 2024 order had categorically banned Rytr from providing any AI-enabled service that could generate consumer reviews, on the theory that Rytr's service provided the "means and instrumentalities" for bad actors to generate fake reviews. In setting aside the order, the FTC rejected this theory, stating that Section 5 does not prohibit a technology simply because it might be used for deceptive purposes. Instead, the FTC shifted its focus to traditional definitions of deception and unfairness, targeting the actual publishers of fake reviews rather than the developers of the AI platforms.

FTC Bureau of Consumer Protection Director Christopher Mufarrige stated:

"Condemning a technology or service simply because it potentially could be used in a problematic manner is inconsistent with the law and ordered liberty."

Commissioner Andrew Ferguson, whose previous dissenting opinion was adopted in the decision, emphasized the danger of over-regulating nascent technology:

"Treating as categorically illegal a generative AI tool merely because of the possibility that someone might use it for fraud is inconsistent with our precedents and common sense. And it threatens to turn honest innovators into lawbreakers and risks strangling a potentially revolutionary technology in its cradle. ... The theory on which the complaint rests would permit the Commission to proscribe Microsoft Word merely because someone may use it to create a fake review, or Adobe Photoshop merely because someone used it to create a false celebrity endorsement."

Following this reversal, the FTC turned its focus directly to the publishers of fake reviews, sending warning letters that emphasize compliance with its 2024 Consumer Review Rule, which carries civil penalties of up to $53,088 per violation.