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What the Executive Order Asks the FTC to Do
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In December 2025, President Trump issued an Executive Order titled “Ensuring a National Policy Framework for Artificial Intelligence.”
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The order directs the FTC Chair to issue, within 90 days, a policy statement explaining when state laws that “require alterations to the truthful outputs of AI models” are preempted by Section 5 of the FTC Act (the ban on unfair or deceptive acts or practices).
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The order is part of a broader federal strategy to curb state AI rules the administration characterizes as forcing “ideological bias” into models or requiring “woke AI.”
Why the FTC’s Preemption Power Is Narrow
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Federal preemption usually comes from Congress, not from executive policy statements, and courts apply a “presumption against preemption” unless Congress clearly meant to displace state law.
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The FTC Act’s Section 5 does not contain an express preemption clause and has never been read to “occupy the field” of consumer protection; states maintain their own consumer protection statutes and often cooperate with the FTC in enforcement.
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That leaves only conflict preemption: the FTC could argue that a state law is invalid if it literally makes it impossible for a company to comply with both Section 5 (no deception) and the state requirement.
Practical Hurdles to Using Section 5 Against State AI Laws
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Courts are unlikely to accept a broad claim that Section 5, which is deliberately general and standards‑based, automatically nullifies whole categories of state AI regulation.
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To have real preemptive force beyond case‑by‑case enforcement, the FTC would likely need to adopt a trade regulation rule on deceptive AI outputs, triggering its onerous Magnuson‑Moss rulemaking process (advance notice, notice of proposed rulemaking, extensive comments, hearings, and a showing that the targeted deceptive conduct is “prevalent”).
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That process can take years and would have to define concrete conflicts—specific types of state mandates that actually require deceptive commercial AI outputs—rather than attacking “ideological bias” in the abstract.
Limits of the FTC’s Subject-Matter Jurisdiction
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Section 5 reaches deception “in or affecting commerce,” so the FTC regulates business practices, such as hidden ads or misleading claims, not general speech or publishing.
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Many contentious AI outputs—on politics, history, or social issues—may be closer to editorial or opinion content than to commercial representations tied to a transaction, making them harder to fit into the FTC’s deception authority.
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The article notes that complaints about “woke AI,” like historically inaccurate images produced by private models, typically reflect company design choices and are protected by the First Amendment when not mandated by government, undercutting both federal and state regulation of those choices.
Implications for State AI Laws
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The Executive Order specifically targets laws like Colorado’s Artificial Intelligence Act, which restricts “algorithmic discrimination,” alleging that they may force models to produce “false results” to avoid differential impact.
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Colorado and similar states can plausibly argue their laws curb biased outputs that reflect distortions in training data (for example, historical lending discrimination) rather than forcing AI systems to lie.
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Because the EO itself cannot preempt state law and the FTC’s statutory basis is thin, the article concludes that federal attempts to use Section 5 to sweep aside broad categories of state AI regulation are likely to face serious judicial resistance and will, at most, support targeted, rule‑backed challenges to clearly deceptive state‑mandated outputs.
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