WHEN IS DISCLOSURE REQUIRED?
Section 4(a) of SB 806 prohibits advertisers from creating and disseminating, or causing the creation and dissemination of, advertisements using synthetic content that “creates a false consumer perception about the nature, origin or authenticity of the goods or services being advertised” without a clear and conspicuous disclosure.
The law defines synthetic content to include images, videos, audio, and text generated or significantly modified using AI. It reaches advertisements created internally and those commissioned through advertising agencies or other vendors.
For example, an automobile advertisement might use AI-generated imagery to depict a vehicle navigating snow or rugged terrain in a manner that exaggerates its actual capabilities. Similarly, an advertisement for athletic footwear might use AI to portray performance or durability that the product cannot deliver. In both cases, the imagery could create a misleading impression of the product’s capabilities, even without an express claim.
Where AI is used in creating advertising, the Pennsylvania law imposes an obligation on the advertiser to effectively decide whether its use could mislead some consumers and affix a disclosure—an approach that could result in risk-averse inclusion of such disclosures.
WHAT MAKES A DISCLOSURE SUFFICIENT?
Section 4(a) requires a disclosure stating that the advertisement contains content modified or generated using artificial intelligence. The disclosure must appear when the “synthetic content” is first presented and must be presented in the same medium as the primary content (e.g., disclosure in the body of a video, photograph, or image).
Placement will be especially important for digital advertising: a disclosure that appears only after a consumer clicks through to another page, or that becomes unreadable when a video is displayed on a mobile device, presents compliance concerns. Advertisers should evaluate disclosures in the format in which consumers actually encounter the advertisement.
ENFORCEMENT AND PENALTIES
Beginning December 21, the Pennsylvania attorney general or an appropriate district attorney may bring an action to restrain prohibited advertising where there is reason to believe a violation is occurring or about to occur and enforcement would serve the public interest.
Courts may award damages, civil fines of up to $3,000, and actual attorney fees and court costs.
WHAT OTHER STATES ARE ADDRESSING SYNTHETIC ADVERTISING?
Pennsylvania’s legislation follows recent developments in New York and California, which have enacted separate disclosure requirements for advertisements featuring synthetic performers.
New York General Business Law Section 396-b, effective as of June 2026, requires advertisers with actual knowledge that an advertisement contains a synthetic performer to disclose such fact. The requirement concerns digitally generated human performances and applies regardless of whether the advertisement misrepresents the underlying product. The law exempts audio-only advertisements and certain other uses and imposes civil penalties of $1,000 for a first violation and $5,000 for subsequent violations.
In September, California enacted SB 1050, effective January 1, 2027. The law requires disclosure (which disclosures were discussed in a recent LawFlash) when an advertisement prominently features a synthetic performer, including a realistic AI-generated figure or voice delivering a commercial message. California also provides a mechanism to require advertising platforms to remove advertisements after a court finds a violation and the platform receives the requisite order.
Other states are considering measures tailored to specific industries. In New Jersey pending Assembly Bill A4728, which advanced from the Assembly Appropriations Committee on October 22, would restrict AI-generated or materially altered residential real estate photographs while permitting specified uses of virtual staging subject to disclosure and other requirements.
CONSIDERATIONS FOR ADVERTISERS
With Pennsylvania’s law taking effect December 21, advertisers should begin reviewing how AI-generated and modified content is reviewed and evaluated in their existing advertising approval processes.
Product demonstrations, before-and-after imagery, and representations about product features or origin should all be reviewed for AI content. Legal and marketing teams should consider the claims communicated by the finished advertisement, the evidence supporting those claims, and whether the use of AI requires disclosure.
Advertisers should also ensure that agencies and creative vendors identify significant AI modifications before final approval. Retaining original imagery, product-testing materials, and information about generated content can help substantiate the claims conveyed by an advertisement.
HOW WE CAN HELP
Morgan Lewis is closely tracking the legal, regulatory, and practical issues surrounding the use of AI. Our cross-practice AI team includes lawyers across disciplines—including technology, data privacy and cybersecurity, litigation, labor and employment, intellectual property, corporate transactions, regulatory matters, and other areas—to help clients address AI governance, adoption, risk management, and compliance.
