Who's Legally Liable for AI-Generated Content? A Business Guide

If your team already relies on AI to produce a first draft, whether that is a blog post, ad copy, a social caption, or a competitor comparison, you have already made the call that AI belongs in your content process. The question now is narrower: when an AI-drafted claim turns out to be wrong, who actually carries the legal exposure, and where does it sit. This guide works through the areas that matter most in practice: misleading commercial claims, copyright, defamation, and the extra care regulated professions need to take.

Why This Matters Once Content Goes Out Under Your Name

Here is how this usually shows up. Alex, a marketing and comms lead at a mid-size business, uses AI to help draft blog posts, ad copy, social captions, and the occasional competitor comparison, then publishes it under the company's name. In one case, an AI-drafted comparison post included a claim about a competitor's product that turned out to be inaccurate. Nothing came of it that time, but the claim sat live on the business's own website for weeks before anyone checked it, and Alex now realises there was no plan for what would have happened if a customer, or the competitor, had acted on it.

That gap is the real risk. Regulators and courts do not treat an AI-drafted claim differently from one a person typed out by hand. The output looks like ordinary marketing copy, and it gets judged the same way. Once content is published under a business's name, the business owns whatever it says, regardless of whether a person or a tool produced the first draft.

The Highest Practical Risk: Misleading or Deceptive Claims

Of the areas covered here, misleading or deceptive commercial claims are the one most businesses actually run into. The test regulators apply is simple: if a human employee had said this to a customer directly, would it be misleading. AI does not get its own, more forgiving standard. A comparison claim, a performance figure, or a testimonial has to be accurate and substantiated whether a person wrote it from scratch or an AI tool generated it from a short prompt.

The US Federal Trade Commission made this explicit with its 2024 enforcement sweep against AI-related deceptive practices, which included action against a company whose AI writing tool was used to generate fake customer reviews and testimonials. The FTC treated AI-generated content that deceives a shopper exactly like human-written content that deceives a shopper; the method of production did not change the analysis. See the FTC's announcement on its AI enforcement sweep for the full detail.

The same principle holds outside the US. The UK's Advertising Standards Authority and its Committee of Advertising Practice have confirmed that existing advertising rules apply in full regardless of whether an ad was written by a person or produced with AI, and that a business cannot use an AI disclosure to excuse a claim that is otherwise misleading (see the ASA and CAP guidance on AI in advertising). In the EU, the equivalent claim is assessed under the Unfair Commercial Practices Directive, which governs misleading and comparative advertising across member states regardless of how the content was produced.

Copyright: Still an Unsettled Area

Copyright is less settled than the misleading-claims question, and the uncertainty cuts both ways. The US Copyright Office has confirmed that purely AI-generated material, with no meaningful human creative input, is not eligible for copyright protection. Content that a person substantially edits, arranges, or builds on top of an AI draft can still qualify, but the test is whether a human actually contributed the creative expression, not whether a human clicked "generate." See the US Copyright Office's guidance on AI and copyright for the underlying position.

For a business publishing AI-drafted content, this cuts two ways. First, a competitor comparison or ad your team treats as proprietary content may not actually be protected if it went out largely as the AI produced it. Second, an AI tool can reproduce phrasing, structure, or even factual claims lifted from a source it was trained on, without your team realising it. Either direction creates a problem you would not have with content a person wrote from their own knowledge.

Defamation: The Same Rules Apply to AI-Drafted Content

Defamation law does not carve out an exception for AI-drafted content. If an AI-generated comparison, review response, or opinion piece makes a false factual statement that damages someone's reputation, whether that is a competitor, a named individual, or another business, the usual defamation standards apply exactly as they would if a staff member had written the sentence themselves. What counts as defamatory, and what defences exist, varies by country and even by state or region within a country, so this is genuinely one to confirm with local counsel rather than assume from a guide like this one.

Regulated Professions Carry an Extra Layer of Risk

If your business operates in a regulated profession, financial services, healthcare, legal services, or another licensed field, AI-drafted content adds a layer on top of the general risks above. Many of these industries have specific rules about what can be claimed in marketing or client communications, on top of general misleading-claims law. An AI tool has no awareness of your industry's specific advertising or communication rules unless someone checks its output against them, which makes a review step more important in these sectors than in general commercial content.

A Practical Review Workflow Before Anything Publishes

None of this means AI-drafted content needs a lawyer's sign-off before every post. It means building a short, repeatable check into the process before anything goes live under the business's name.

A workable version looks like this:

• Treat every factual claim about a competitor, a product, or a result as unverified until someone checks it against a real source.
• Run a quick search on any distinctive phrase or structure that reads like it could be lifted from somewhere else, particularly in longer comparison pieces.
• Have a named person, not "the team," responsible for the final check before anything about a competitor or a specific claim goes live.
• Keep a simple record of what was checked and by whom, so there is something to point to if a claim is ever challenged later.
• Flag anything touching a regulated area, financial, health, or legal claims, for an extra look against that industry's specific rules, not just general accuracy.

Related reading: our AI governance by region.

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