On August 3, a coalition of more than 20 state attorneys general joined civil society groups in filing coordinated opposition to the FTC’s proposed policy statement recasting undisclosed AI output “steering” as consumer deception under Section 5. The filings, submitted just after the July 31 comment window closed, represent the first serious on-the-record resistance to a theory the Commission advanced on a 2-0 vote and published July 7 as 91 FR 41638, acting under Executive Order 14365 that President Trump signed December 11, 2025.

The proposal carves out hallucinations attributable to technical limits and targets only intentional steering toward undisclosed ideological ends. It also asserts implied preemption over Colorado’s AI Act where the two conflict. That’s where the theory begins to strain against the calendar.

Colorado SB 24-205, the statute the FTC’s preemption argument implicitly targets, was already repealed. Its narrower replacement, SB 26-189, was enacted May 14, 2026, and its enforcement is currently paused under a federal injunction xAI obtained in April. The Commission is asserting supremacy over a state regime that state legislators have already dismantled and that a federal court has already frozen.

The substantive objections cut deeper. CDT’s comment argues no neutral AI baseline exists, since every training and tuning choice shapes outputs, and frames model design as protected editorial judgment under the First Amendment. EFF, filing jointly with Public Knowledge and Fight for the Future, warns that the policy would expose routine safety tuning to federal liability. California, Colorado, and roughly 20 additional state AGs argue the proposal forces firms to choose between complying with state civil rights law and complying with the federal deception theory.

Docket FTC-2026-0859 closed with 40 comments. The Commission says it’ll review all timely submissions before finalizing. Any final statement inherits both a queued First Amendment challenge and a preemption target that has already been legislated out from under it.

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