When Artificial Intelligence Discriminates

The FTC has issued Business Guidance about the use of artificial intelligence (AI), warning marketers about the danger of the potential discriminatory impact of automated decision-making. As the FTC noted, the use of AI "presents risks, such as the potential for unfair or discriminatory outcomes or the perpetuation of existing socioeconomic disparities." To illustrate the risk, the FTC's Guidance cites a study of an algorithm used to target medical interventions to the sickest patients that wound up funneling resources to a healthier, white population, to the detriment of sicker, black patients. The Guidance also cites a number of enforcement actions brought by the FTC and other government agencies under the Fair Credit Reporting Act, the Equal Credit Reporting Act, the Fair Housing Act, and more, where companies have used big data in misleading or discriminatory ways in their advertising, targeting practices or in their other interactions with consumers. To mitigate these risks, the FTC's Guidance recommends that companies using artificial intelligence tools be "transparent, explainable, fair, and empirically sound, while fostering accountability."