Why Deepfakes and AI-Generated Media Are a Business Issue?
Deepfakes—the use of advanced artificial intelligence to create realistic but fake videos, images, or audio—are no longer just an internet curiosity. In 2024 and 2025, corporate security teams, compliance officers, and general counsel have seen a surge in fraud attempts and reputational crises driven by AI-generated content. From executives’ voices cloned to authorize fraudulent wire transfers, to fake customer reviews undermining brand trust, synthetic media is now a mainstream threat. Businesses that fail to anticipate this risk face financial losses, regulatory exposure, and reputational damage.
Understanding Deepfakes, Synthetic Media, and Fraud Risks
What Are Deepfakes?
Deepfakes are hyper-realistic videos, audio clips, or images created by deep learning algorithms. Using publicly available photos, recordings, or even short clips, an attacker can fabricate a convincing message, video call, or endorsement.
Common Business Threat Scenarios
- CEO Voice Fraud (“vishing”): AI-cloned voices of executives request urgent wire transfers.
- Fake Testimonials & Reviews: Competitors or bad actors deploy synthetic personas to harm your brand online.
- Synthetic Identity Documents: Fraudsters use AI to produce fake IDs or financial statements to bypass onboarding.
- Manipulated Evidence: In litigation or regulatory contexts, deepfakes can be used to discredit whistleblowers or fabricate misconduct.
Legal Risks of AI-Generated Media
Privacy & Data Protection
Collecting and using biometric data to train AI models can implicate privacy laws such as the California Consumer Privacy Act / California Privacy Rights Act (CCPA/CPRA), Illinois’s Biometric Information Privacy Act (BIPA), and the EU’s General Data Protection Regulation (GDPR). Businesses distributing or hosting deepfakes must understand disclosure and consent obligations.
Defamation & False Light
Deepfakes used to depict false statements can expose businesses to claims for defamation or “false light” invasion of privacy if they host or republish the content. Conversely, a company harmed by a fake video may have its own defamation or business-disparagement claims.
Intellectual Property Infringement
AI-generated media may infringe copyrights, trademarks, or rights of publicity (name, image, likeness). California’s Civil Code § 3344 provides statutory damages for misappropriation of likeness.
Legal Remedies for Deepfake Harms
Civil Actions Under State Law
- California Civil Code § 1708.86 (Deepfake Statute): It grants individuals a civil cause of action for certain non-consensual sexual deepfakes. It provides a private right of action for injunctive relief, damages, and attorneys’ fees.
- Common-Law Privacy Torts:
- Public Disclosure of Private Facts and False Light protect against highly offensive misrepresentations.
- Intrusion Upon Seclusion claims can apply if deepfakes are made using unlawfully obtained private images.
- Defamation & Trade Libel: Businesses can sue over deepfake content that makes false factual assertions harming reputation or business goodwill.
- Right of Publicity (Cal. Civ. Code § 3344): Unauthorized use of a person’s likeness—even an AI-generated likeness—can support statutory and punitive damages.
Federal Remedies
- Lanham Act (15 U.S.C. § 1125): Prohibits false endorsements and misrepresentation in commerce. A deepfake ad or testimonial falsely implying endorsement can violate the Lanham Act.
- Federal Trade Commission (FTC) Enforcement: The FTC has warned that undisclosed or deceptive use of AI-generated testimonials may constitute an unfair or deceptive act under Section 5 of the FTC Act.
- Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030: If deepfakes are part of unauthorized computer intrusions (e.g., harvesting private data or hijacking accounts to post fakes), the CFAA can support civil actions and criminal prosecution.
- Identity Theft & Impersonation Statutes: Federal identity theft laws (18 U.S.C. § 1028, § 1028A) criminalize fraudulent use of another’s identity or credentials.
Equitable Remedies
The courts may issue temporary restraining orders or injunctions to stop dissemination of deepfake content, order takedowns, or freeze domain names used for impersonation. Swift injunctive relief is crucial in preventing viral spread.
Anti-Fraud and Identity Theft Laws Businesses Should Know
State Anti-Fraud and Cybercrime Statutes
- California Penal Code § 502 (Comprehensive Computer Data Access and Fraud Act): Provides civil and criminal remedies for unauthorized access to computer systems and data—often relevant when attackers use deepfakes to infiltrate networks.
- Uniform Trade Secrets Act (Cal. Civ. Code § 3426): Protects proprietary algorithms or content misappropriated to produce deepfakes.
Federal Identity Theft & Wire Fraud Laws
- 18 U.S.C. § 1343 (Wire Fraud): Deepfake-enabled schemes transmitted by wire can trigger federal wire fraud charges.
- 18 U.S.C. § 1028 (Fraud and Related Activity in Connection with Identification Documents): Prohibits production and use of fraudulent identification documents—including synthetic ones created with AI.
Regulatory Trends
- The EU AI Act (2024): Requires clear labeling of AI-generated content, especially “deepfakes.”
- Several U.S. states (Texas, California, New York) have passed or proposed statutes targeting deepfakes in elections and consumer deception.
Businesses Protection Strategies
- Build a Deepfake Incident Response Plan: Designate a cross-functional team (legal, security, communications) to evaluate and respond to synthetic media incidents. Include procedures for takedown notices, platform escalation, and emergency injunctions.
- Strengthen Internal Fraud Controls: Multi-factor authentication, “call-back” verification for financial transactions, and staff training on spotting synthetic audio/video can reduce exposure to CEO fraud scams.
- Contractual Protections: Update marketing and influencer contracts to require disclosure of AI-generated content and indemnification for deepfake-related claims.
- Monitor and Detect: Deploy AI-powered detection tools to scan for unauthorized uses of your brand, executives, or products in synthetic media.
- Know Your Remedies: Map out which claims—defamation, privacy, right of publicity, Lanham Act, CFAA—apply to your business’s risk profile. So, being ready to file quickly for injunctive relief can prevent viral harm.
So, in conclusion, deepfakes and other AI-generated media have moved from fringe curiosity to mainstream business risk. They present a double threat: fraud and reputational harm on one side, and regulatory and legal exposure if your business uses AI-generated content improperly on the other. By understanding the legal landscape—state deepfake statutes, federal anti-fraud and identity theft laws, FTC guidance—and putting incident response and contractual protections in place, companies can shift from reactive crisis management to proactive resilience. Our artificial intelligence and privacy legal team can help you evaluate exposure, update policies, and pursue legal remedies. Please feel free to contact our law firm at your earliest convenience.