Autonomous Vehicles

On July 13, the Federal Trade Commission published a notice of proposed rulemaking regarding the Motor Vehicle Dealers Trade Regulation Rule.  The Motor Vehicle Dealers Trade Regulation Rule is aimed at combating certain unfair and deceptive trade practices by dealers and promoting pricing transparency.  Comments to the proposed rule are due on or before September 12, 2022. 

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The proposed rule:

  1. Prohibits dealers from making certain misrepresentations in the sales process, enumerated in proposed § 463.3.  The list of prohibited misrepresentations includes misrepresentations regarding the “costs or terms of purchasing, financing, or leasing a vehicle” or “any costs, limitation, benefit, or any other Material aspect of an Add-on Product or Service.”
  • Includes new disclosure requirements regarding pricing, financing and add-on products and services.  Notably, the proposed rule would obligate dealers to disclose the offering price in many advertisements and communications with consumers.
  • Prohibits charges for add-on products and services that confer no benefit to the consumer and prohibits charges for items without “Express, Informed Consent” from the consumer (which, notably, as defined, excludes any “signed or initialed document, by itself”).  The proposed rule outlines a specific process for presenting charges for add-on products and services to the consumer, which obligates the dealer to disclose and offer to close the transaction for the “Cash Price without Optional Add-Ons” and obtain confirmation in writing that the consumer has rejected that price.
  • Imposes additional record-keeping requirements on the dealer, in order to demonstrate compliance with the rule.  The record-keeping requirements apply for a period of 24 months from the date the applicable record is created.

Continue Reading FTC Proposes Motor Vehicle Dealers Trade Regulation Rule

This quarterly update summarizes key federal legislative and regulatory developments in the second quarter of 2022 related to artificial intelligence (“AI”), the Internet of Things, connected and automated vehicles (“CAVs”), and data privacy, and highlights a few particularly notable developments in U.S. state legislatures.  To summarize, in the second quarter of 2022, Congress and the Administration focused on addressing algorithmic bias and other AI-related risks and introduced a bipartisan federal privacy bill.

Artificial Intelligence

Federal lawmakers introduced legislation in the second quarter of 2022 aimed at addressing risks in the development and use of AI systems, in particular risks related to algorithmic bias and discrimination.  Senator Michael Bennet (D-CO) introduced the Digital Platform Commission Act of 2022 (S. 4201), which would empower a new federal agency, the Federal Digital Platform Commission, to develop regulations for online platforms that facilitate interactions between consumers, as well as between consumers and entities offering goods and services.  Regulations contemplated by the bill include requirements that algorithms used by online platforms “are fair, transparent, and without harmful, abusive, anticompetitive, or deceptive bias.”  Although this bill does not appear to have the support to be passed in this Congress, it is emblematic of the concerns in Congress that might later lead to legislation.

Additionally, the bipartisan American Data Privacy and Protection Act (H.R. 8152), introduced by a group of lawmakers led by Representative Frank Pallone (D-NJ-6), would require “large data holders” (defined as covered entities and service providers with over $250 million in gross annual revenue that collect, process, or transfer the covered data of over five million individuals or the sensitive covered data of over 200,000 individuals) to conduct “algorithm impact assessments” on algorithms that “may cause potential harm to an individual.”  These assessments would be required to provide, among other information, details about the design of the algorithm and the steps the entity is taking to mitigate harms to individuals.  Separately, developers of algorithms would be required to conduct “algorithm design evaluations” that evaluate the design, structure, and inputs of the algorithm.  The American Data Privacy and Protection Act is discussed in further detail in the Data Privacy section below.Continue Reading U.S. AI, IoT, CAV, and Data Privacy Legislative and Regulatory Update – Second Quarter 2022

          On April 28, 2022, Covington convened experts across our practice groups for the Covington Robotics Forum, which explored recent developments and forecasts relevant to industries affected by robotics.  One segment of the Robotics Forum covered risks of automation and AI, highlights of which are captured here.  A full recording of the Robotics Forum is available here until May 31, 2022.

            As AI and robotics technologies mature, the use-cases are expected to grow in increasingly complex areas and to pose new risks. Because lawsuits have settled prior to a court deciding liability questions, no settled case law yet exists to identify where the liability rests between robotics engineers, AI designers, and manufacturers.  Scholars and researchers have proposed addressing these issues through products liability and discrimination doctrines, including the creation of new legal remedies specific to AI technology and particular use-cases, such as self-driving cars.  Proposed approaches for liability through existing doctrines have included:Continue Reading Robotics Spotlight: Risks of Automation and AI

As discussed in our previous article on the topic, China’s new 14th Five-Year Plan is a vast document that outlines the country’s ambitious plans for the 2021-2025 period. Technology and the environment are two main themes of the plan, with several chapters dedicated to describing how China’s leaders hope to…
Continue Reading China’s 14th Five-Year Plan (2021-2025): Spotlight on New Energy Vehicles (NEVs)