Why is the FTC avoiding new AI rules right now?

The FTC can police deceptive, unfair, or unsafe practices with existing laws like Section 5 and COPPA. It appears to prefer case‑by‑case enforcement over launching complex AI rulemaking. That keeps pressure on conduct while giving AI developers short‑term relief from new federal data privacy regulations, without reducing scrutiny of harms to minors.

What are age verification laws and who must comply?

Age verification laws require platforms to estimate or verify user age before offering features that may harm minors, like targeted ads or messaging. They often apply to social media, gaming, and content sites with young users. Companies must implement proportionate checks, adjust defaults for minors, and document risks tied to children’s online privacy.

How could COPPA amendments affect product design?

Potential COPPA amendments could raise the covered age, tighten consent rules, and demand privacy‑by‑default for young users. That would push clearer notices, less profiling, stricter data minimization, and safer engagement features. Teams should prepare modular experiences for minors and build consent, age estimation, and retention controls into core workflows now.

Which sectors face the highest near-term litigation risk?

Platforms, app stores, ad‑tech, and EdTech with large youth audiences face the most exposure. Expect actions over profiling, parental consent failures, and sharing with analytics or ad partners. Strong controls, vendor cleanup, and transparent reporting reduce risk. Watch for early settlements that set reference points for data privacy regulations in 2026.

Law and Government

US Data Privacy February 02: FTC Skips AI Rules, Kids’ Privacy Push

ByDanny Kontos February 2, 2026February 2, 2026

Data privacy regulations are in focus after the FTC signaled on February 2 that it will not pursue AI‑specific rules for now and will instead prioritize children’s privacy enforcement. States continue to push age verification and youth design mandates. For investors, this points to near‑term compliance and litigation exposure for platforms, app stores, ad‑tech, and EdTech. We outline how policy momentum shifts, where enforcement may land first, and how to position for clearer rules without overreacting to headlines.