Advertising Law Compliance in 2026: Five Developments Every Advertiser Should Know

The cumulative effect is a regulatory landscape that is broader, more technical, and less forgiving of compliance gaps. Here are five trends and developments that should be on every advertiser’s radar this year.

1. AI Disclosures in Advertising

In 2025, New York enacted a first-in-the-nation law requiring businesses to disclose the use of “synthetic performers” — artificial intelligence (AI)-generated human likenesses that do not depict actual living persons — in commercial advertising. Under the law, which takes effect June 9, advertisers distributing visual or audiovisual ads to New York audiences, including online and social media campaigns, must “conspicuously” disclose when an ad features a synthetic performer. Violations carry escalating civil penalties, giving the requirement real teeth.

This law stands apart within the emerging AI regulatory framework. To date, state disclosure requirements, including those enacted in California, Colorado, and Utah, have focused on two general areas: transparency obligations around consumer-facing AI interactions and AI-driven decisions, and provenance requirements for AI system providers, such as California’s mandate that AI-generated content carry embedded provenance data. The New York law is the first to impose disclosure obligations directly on the downstream users of AI-generated content based on what appears in the creative output, bringing AI regulation into the advertising production process.

While similar laws are not yet widespread, the statute is an early regulatory signal. Similar legislation has already been introduced in other states, and the momentum appears likely to continue. For advertisers experimenting with AI-generated models, virtual influencers, and other synthetic creative tools, disclosure risk is no longer theoretical — it is a live compliance concern.

2. Claim Substantiation: AI and Health Performance Claims 

AI Performance Claims

Traditional claim substantiation principles remain as relevant as ever, and this is another area of advertising law where AI has drawn heightened scrutiny. With AI-powered products and services increasingly becoming a selling point across industries, the Federal Trade Commission (FTC) has made clear that claims about AI capabilities must be backed by competent and reliable evidence. The standard is familiar; the application is new.

The FTC’s “Operation AI Comply” initiative, launched in 2024, made this a sustained enforcement priority. Since its inception, the agency has brought more than a dozen actions targeting inflated or unsubstantiated claims about AI capabilities — a pattern of enforcement that continued into 2025 and early 2026. Just last month, the FTC settled with Growth Cave for $48.6 million over a number of alleged violations, including claims that its AI software would automate “nearly 100%” of the work of building an online education course — when users were in fact required to perform most tasks manually. The FTC’s message is clear: marketing hype about AI will be measured against traditional substantiation requirements. 

Health Benefit Claims

With health and wellness products representing a massive force in the consumer economy, health benefit claims remain a core FTC enforcement priority. For one, the surging consumer interest in GLP-1 weight-loss drugs has not gone unnoticed by the agency. Its 2025 action against NextMed alleged that the telehealth company capitalized on GLP-1 demand by using unsubstantiated weight-loss claims, fake testimonials, and manipulated reviews to sell its programs. But the agency’s focus extends well beyond weight loss. Recent enforcement actions have targeted unsubstantiated claims across product categories ranging from dietary supplements to disease treatment. 

BBB National Programs’ National Advertising Division’s (NAD) docket is similarly active, where health benefit claims are among the most common issues under review. In recent cases, the NAD has recommended discontinuation or modification of a wide array of claims due to inadequate substantiation, including mood-boosting claims for children’s supplements, teeth whitening and “microbiome safe” representations for oral care products, sensation-related claims for sexual wellness products, and accelerated wound healing for bandages. In the latter instance, the advertiser, ASO, LLC, claimed that its hydrocolloid bandages healed wounds “2x faster.” When ASO failed to comply with NAD’s recommendations, the matter was referred to the FTC and US Food and Drug Administration — a reminder that self-regulatory proceedings can escalate to federal enforcement.

3. Pricing Transparency: Drip Pricing and Surveillance Pricing 

Drip Pricing

In the last year, pricing transparency has emerged as a top-tier enforcement priority, with federal and state regulators taking direct aim at “drip pricing” practices that obscure the true cost of goods or services at the point of advertising. This trend is likely to continue throughout 2026, and the underlying theory is straightforward: a price that omits mandatory seller-imposed fees is a misleading price.

The FTC’s Junk Fee Rule, which took effect in May 2025, addresses drip pricing in the live event ticketing and short-term lodging sectors, requiring advertised prices to include all mandatory fees other than reasonable shipping costs and taxes. States have legislated in this area as well, and these laws often go further than the FTC’s sector-specific rule. California’s Honest Pricing Law (effective July 1, 2025) and Minnesota’s all-in pricing statute (effective January 1, 2025) apply similar “all in” pricing requirements across industries, while additional states, including Colorado, Connecticut, Oregon, and Virginia, have enacted or are implementing similar sector-agnostic pricing transparency requirements.

Surveillance Pricing

At the same time, New York has enacted the nation’s first algorithmic pricing disclosure law, which took effect on November 10, 2025. The Algorithmic Pricing Disclosure Act targets “surveillance pricing” — the practice of using consumers’ personal data, such as browsing history, location, and purchase behavior, to generate individualized prices. Under the law, businesses that set prices in this manner must display a clear and conspicuous disclosure, with the specific wording mandated by statute. 

New York is unlikely to be alone for long. Similar surveillance pricing disclosure bills have already been introduced in numerous states, including California, Pennsylvania, and Texas. Taken together with the rise of drip pricing regulation, these developments reflect a broader state-level focus on how pricing architecture, including technology-driven pricing models, is presented to consumers.

4. Subscription Marketing

While the regulatory landscape for subscription marketing is in flux, the compliance stakes remain high. The FTC’s widely publicized Click-to-Cancel rule — which would have imposed prescriptive nationwide standards on subscription disclosures, consent mechanisms, and cancellation processes — was vacated by a federal appellate court in July 2025 on procedural grounds before it ever took effect. 

Importantly, though, the court’s decision did not eliminate federal oversight. Subscription marketing remains governed by the Restore Online Shoppers’ Confidence Act and Section 5 of the FTC Act, which continue to anchor enforcement actions challenging deceptive renewal flows and cancellation friction. Further, the FTC recently signaled that it plans to engage in renewed rulemaking in this space, meaning the Click-to-Cancel framework, or something like it, may return.

In the meantime, exposure is increasingly driven at the state level, where legislative activity remains hot. More than two dozen states now have auto-renewal laws on the books, and the list continues to grow. California’s amended Automatic Renewal Law (effective July 1, 2025) now requires “express affirmative consent” to the auto-renewal terms (separate from consent to the overall agreement), annual reminders regardless of subscription term length, and a prominent “click to cancel” button enabling immediate online cancellation. 

Amendments strengthening existing laws have also taken effect — or will soon — in states including Colorado (requiring one-step online cancellation), Connecticut (requiring annual reminders regardless of term length and imposing strict requirements for telephone cancellation), and Maine (requiring separate consent to auto-renewal terms), while Arkansas and Maryland recently enacted their first auto-renewal laws. The details vary, but the direction is consistent: Regulators expect subscription terms to be clear, consent to be affirmative, and cancellation to be easy.

Importantly, many of these state regimes operate alongside consumer protection statutes that permit private class actions, making subscription marketing a frequent and attractive target for plaintiffs’ firms. Noncompliance can thus trigger both regulatory enforcement and parallel private litigation risk, a combination that significantly raises the cost of getting it wrong. For any business operating a recurring-billing model, this is an area that warrants close and ongoing attention.

5. Endorsements and Reviews

Regulators are expanding their scrutiny of the credibility signals that drive modern digital marketing, and they now have sharper tools to back it up. The FTC’s Consumer Review Rule, which took effect in October 2024, gives the agency civil penalty authority to target fake reviews, undisclosed insider testimonials, and review suppression practices. The rule operates alongside the agency’s updated Endorsement Guides, which continue to anchor enforcement around paid endorsements and material connections. Together, these frameworks signal that the FTC views manipulated testimonial and review ecosystems as a core deception concern, not a peripheral compliance issue.

The FTC has wasted little time putting companies on notice. In December 2025, the agency sent warning letters to 10 companies over potential violations of the Consumer Review Rule, flagging practices such as generating or purchasing fake reviews, offering incentives only for positive reviews, failing to disclose insider relationships, and suppressing negative feedback. The letters remind recipients that violations can result in civil penalties of up to $53,088 per occurrence, which can quickly add up.

Private plaintiffs are now stepping into the enforcement arena alongside regulators. In the first half of 2025, a coordinated wave of class actions targeted major brands, including Celsius, Shein, Revolve, and Alo Yoga, along with individual influencers, alleging that undisclosed paid endorsements violated state consumer protection laws and allowed companies to charge inflated prices. The complaints sought damages ranging from $25 million to over $500 million. How these cases ultimately fare remains to be seen, but their emergence signals that the plaintiffs’ bar views influencer disclosure failures as viable class action fodder, and that compliance exposure now extends well beyond government enforcement. For brands relying on influencer marketing, monitoring third-party endorsement practices is no longer optional.