AI Consumer Protection and the Robot Lawyer: Policy Optionality in the FTC’s DoNotPay Case

Abstract

This brief report analyses the U.S. Federal Trade Commission’s (FTC) enforcement action against DoNotPay, a company that marketed itself as the “world’s first robot lawyer,” to examine how consumer protection law is being applied to AI-driven services that make exaggerated or misleading claims. Situated within the FTC’s broader Operation AI Comply initiative, the case illustrates a growing emphasis on accountability in the marketing of AI-enabled consumer products. The analysis identifies four policy options available to the FTC: taking no action, enforcing existing law on a case-by-case basis, introducing comprehensive AI legislation, and promoting industry self-regulation. Among these, the study finds that continued case-by-case enforcement supplemented by voluntary ethical self-regulation offers the most effective and proportionate means of balancing consumer protection with innovation. This dual approach recognizes that there are no exemptions from existing law for AI while encouraging developers to adopt professional standards of truthfulness, accountability, transparency, and oversight. The paper concludes that effective AI governance in the consumer domain requires a hybrid model that combines vigilant legal enforcement with moral self-regulation to sustain both consumer trust and technological progress.