# AI AVATAR PRODUCTION — US VARIANT (Disclosure Law)

> **Region:** United States, Canada
> **Primary law:** FTC Endorsement Guides (16 CFR Part 255), 2023 update
> **Disclosure trigger:** Material connection (paid, sponsored, free product, family/employer)
> **Penalty range:** Variable; recent enforcement targets $40K+ per violation against influencers and brands

---

## Legal foundation — FTC Endorsement Guides

The Federal Trade Commission enforces truth-in-advertising under Section 5 of the FTC Act. The 2023 update to 16 CFR Part 255 ("Guides Concerning the Use of Endorsements and Testimonials") clarified rules for influencer marketing and now extends to AI-generated content.

### When disclosure is REQUIRED

- Paid sponsorship (any cash or equivalent compensation)
- Free product worth more than a token amount
- Affiliate links earning commission
- Employee endorsements of the employer's product
- Family member endorsements

### When disclosure is also strongly advised

- AI-generated likeness of a real person (even unpaid)
- AI-generated voice of a real person
- Deepfake-style content showing a person doing something they did not do

> **Note:** While the FTC has not (as of 2025-2026) issued a final rule mandating AI labels for all AI content, the **FTC AI Rule on Impersonation** (2024) penalizes AI-impersonation of individuals and government agencies.

---

## Clear and Conspicuous standard

The FTC requires disclosures to be **clear and conspicuous**. As of 2024 guidance, this means:

| Requirement | Practical implication |
|-------------|----------------------|
| Same modality as the claim | Video claim -> video disclosure (not text-only) |
| Unavoidable | Cannot require scrolling, clicking "more" |
| Sustained | Must be visible long enough to be read |
| Plain language | "Ad" / "Sponsored" / "Paid partnership" — not "sp" / "thx to" |
| Same language as audience | English-speaking US audience -> English disclosure |

### 2024 Update — Video disclosure within first 3 seconds

The FTC clarified in 2023-2024 that for short-form video (TikTok, Reels, Shorts), disclosure must appear:

- **Visually:** First 3 seconds of the video
- **Verbally:** Spoken aloud at the start
- **Persistent:** On-screen text remains for the full duration

Hashtag-only disclosure (`#ad` buried in description) is INSUFFICIENT.

---

## Required disclosure formats

### For sponsored AI avatar video (US)

| Element | Example |
|---------|---------|
| On-screen text (first 3s) | "Sponsored by [Brand]" or "#Ad — [Brand]" |
| Spoken disclosure | "This video is sponsored by [Brand]..." |
| Description hashtag | `#ad #sponsored #partner` |
| Platform tag | Meta "Paid partnership" / TikTok "Branded content" |

### For AI-generated content (broadly)

| Element | Example |
|---------|---------|
| On-screen text | "Created with AI" or "AI avatar" |
| Spoken disclosure (recommended) | "This video uses an AI avatar..." |
| Platform tag | YouTube "Altered content", TikTok "AI-generated label", Meta "AI info" |

### Combined (most common)

```
First 3 seconds, on-screen:
"#Ad — Sponsored by [Brand] — AI avatar"

Spoken at the start:
"Hey, quick heads up — this video is sponsored by [Brand],
 and yes, it's me but with an AI avatar."
```

---

## Penalty structure

| Tier | Action | Typical penalty |
|------|--------|----------------|
| Warning letter | First-time minor violation | No fine, but reputational risk |
| Consent decree | Recurring or serious | Cease + injunction |
| Civil penalty | Material connection not disclosed | $43K+ per violation (2024 figure) |
| Disgorgement | Significant revenue from deceptive AI ads | Refund + civil penalty |

**Note on brand vs. influencer liability:** The FTC pursues BOTH. The brand is responsible for monitoring its influencers; the influencer is responsible for personal disclosure.

---

## YouTube YPP-specific rules

YouTube Partner Program (YPP) requires:

- "Altered content" label for AI-generated likenesses of real people
- Description disclosure of AI used in monetized videos
- No monetization for content violating Community Guidelines on impersonation

If your video runs ads on YouTube, you MUST tick "Altered content" in the upload flow when:
- AI-generated voice imitating a real person
- AI-modified video of a real event
- AI deepfake of a real person

---

## Meta (Facebook / Instagram) policy

Meta requires AI-content disclosure as of 2024:

- Meta "AI info" label appears automatically when their classifier detects AI generation
- Creators can manually add the "AI info" label for content not auto-flagged
- Sponsored AI content needs BOTH:
  - "Paid partnership" tag (for sponsorship disclosure)
  - "AI info" tag (for AI disclosure)

---

## TikTok policy

TikTok requires (as of 2024):
- "AI-generated" label on synthetic media showing real people / events
- "Branded content" toggle for sponsored content
- Auto-detection now flags many AI avatars; creators should pre-empt by self-labeling

---

## CCPA / state privacy considerations

| State | Law | AI avatar implication |
|-------|-----|-----------------------|
| California | CCPA / CPRA | Voice and face = personal data; consent for clone of CA residents |
| Illinois | BIPA | Strict biometric privacy; written consent required for face/voice clones |
| Texas | CUBI | Similar to BIPA, consent required |
| Washington | My Health My Data Act | Health-related AI content adds extra consent |

**BIPA risk:** Illinois plaintiffs have won 7-figure settlements for biometric data use without written consent. If your audience includes Illinois residents, get explicit written consent before cloning a voice or face.

---

## Practical disclosure decision tree

```
Is this AI avatar content paid / sponsored?
    Yes -> Disclose paid (FTC) AND AI (Meta/TikTok/YouTube)
    No -> Is the avatar imitating a real person?
        Yes -> Disclose AI (FTC AI Impersonation Rule)
        No -> Is it on YouTube monetized?
            Yes -> Disclose AI (YPP policy)
            No -> Disclose AI (recommended for trust)
```

---

## Recommended on-screen text templates

| Scenario | Text |
|---------|------|
| Sponsored, AI avatar | "#Ad — AI avatar — [Brand]" |
| Organic, AI avatar | "AI avatar" |
| Affiliate, AI avatar | "#Ad — Affiliate link — AI avatar" |
| Employee endorsement | "Employee of [Brand] — AI avatar" |

---

## Sample compliant script — US sponsored AI avatar (60s)

```
[First 3 seconds — on-screen + spoken]
Text overlay: "#Ad — AI avatar — sponsored by Brand X"
Spoken: "Heads up — this video is sponsored by Brand X, and yes,
        I'm using an AI avatar today."

[Hook — seconds 4-7]
"If you're tired of [pain point], stick around..."

[Body — seconds 8-50]
[Standard script flow]

[CTA — seconds 51-60]
"Tap the link to try Brand X. Affiliate disclosure in description."

[Description, end of video]
"#Ad — This video is sponsored by Brand X.
 Created using AI avatar technology.
 Affiliate links earn me commission at no extra cost to you."
```

---

## US-specific checklist before publishing

- [ ] Material connection identified (paid / free product / employee / family)?
- [ ] Disclosure in first 3 seconds (visual + spoken)?
- [ ] Hashtag disclosure in description (`#ad`, `#sponsored`)?
- [ ] Platform-specific AI label applied (Meta / TikTok / YouTube)?
- [ ] If imitating a real person: written consent on file?
- [ ] If audience includes IL / WA / TX residents: state biometric consent in place?
- [ ] If YouTube monetized: "Altered content" ticked in upload?
- [ ] Brand has approval log showing disclosure compliance?

---

## References

- FTC, "Guides Concerning the Use of Endorsements and Testimonials in Advertising" (16 CFR Part 255), 2023 update
- FTC, "Rule on Impersonation of Government and Businesses" (2024), and Notice of Proposed Rulemaking on individual impersonation
- FTC Staff, "Disclosures 101 for Social Media Influencers" (2019, with 2023 update)
- BIPA: 740 ILCS 14 (Illinois Biometric Information Privacy Act)
- YouTube Partner Program — Altered or synthetic content policy
- Meta Transparency Center — AI labeling
- TikTok Community Guidelines — Synthetic media policy

---

*US Variant | Skill 24 (AI Avatar Production Global) | v1.0.0*
