Arizona Anti Dirty Dealing Act

Jan 23

An Act to protect Arizona consumers, businesses, and workers from digital and telephone fraud, to ensure fair competition in digital markets, to establish transparency in commercial communications and artificial intelligence, and to provide enhanced protections for rural and vulnerable populations.

Be it enacted by the Legislature of the State of Arizona:

ARTICLE 1: GENERAL PROVISIONS

Section 101. Short Title

This Act shall be known and may be cited as the "Arizona Anti Dirty Dealing Act."

Section 102. Legislative Findings and Purpose

(a) The Legislature finds based on extensive evidence, testimony, and documented harm to Arizona residents and businesses:

(1) Competitive markets are essential to Arizona's economic prosperity, consumer welfare, innovation, and democratic society.

(2) Digital platforms have transformed commerce, creating new opportunities but also new forms of market power and potential abuses, including sophisticated fraud schemes that cross platforms and target vulnerable populations, resulting in documented losses exceeding $85 million annually to Arizona residents.

(3) Certain digital platforms have attained positions of substantial and enduring market power, creating dependencies among Arizona businesses that can be exploited through unfair practices, with 42% of rural small businesses reporting targeted digital fraud attempts.

(4) Traditional antitrust and consumer protection laws, while still applicable, require modernized tools to address novel competitive harms in digital markets, including platform conflicts of interest, data exploitation, and anti-competitive financial services integration that harm Arizona businesses.

(5) The integration of payment processing, banking, and financial services by dominant platforms creates unique risks of data exploitation, tying arrangements, and market foreclosure that threaten Arizona businesses, documented in cases before the Attorney General.

(6) Automated accounts, bots, and coordinated inauthentic behavior distort platform metrics, enable harassment campaigns, and facilitate advertising fraud that harms Arizona businesses and consumers, with documented cases of bot networks targeting Arizona small businesses.

(7) Digital advertising fraud, including delivery of ads to bots and click farms rather than human customers, represents a multi-billion dollar drain on Arizona businesses and distorts competitive outcomes.

(8) Deceptive naming, labeling, and meaningless differentiation practices mislead Arizona consumers and create unfair advantages for businesses that make false or exaggerated claims about products, services, or credentials.

(9) Generative artificial intelligence systems create new risks of deception, fraud, and unfair competition through AI-generated content that appears authentic but may contain false claims, impersonate real people, or violate legal standards without proper disclosure or verification.

(10) Rural Arizonans, seniors, and small businesses face disproportionate harm from digital and telephone fraud due to geographic isolation, limited access to fraud recovery resources, and higher reliance on telephone communications in areas with inadequate broadband service, with county sheriffs testifying to significant underreporting.

(11) Spoofed robocalls and deceptive telemarketing practices have eroded trust in telephone communications, disrupted daily life, and served as entry points for more sophisticated fraud that continues through digital channels, constituting approximately 45% of all consumer complaints to the Arizona Corporation Commission.

(12) Digital platforms that connect users for transactions or services are being exploited by scammers who use fake identities to obtain legitimate users' contact information, facilitating off-platform fraud that evades traditional consumer protections, with law enforcement documenting specific patterns of job board and rental platform scams.

(13) Romance scams and catfishing schemes targeting Arizona residents have reached epidemic levels, with the Arizona Attorney General's Office reporting a 300% increase in reported cases from 2023-2025, resulting in losses exceeding $25 million annually, with particular concentration in dating applications, social media platforms, and online marketplaces where fraudulent profiles facilitate financial exploitation.

(14) Employment scams targeting Arizona job seekers through fraudulent job postings on digital platforms have increased by 250% since 2022, with documented cases of identity theft, financial loss, and exploitation of vulnerable populations, particularly affecting recent graduates, immigrants, and rural residents.

(15) Rental and real estate scams using fake listings on digital platforms have cost Arizona residents millions in lost deposits and fraudulent payments, with Phoenix and Tucson identified among the top metropolitan areas nationally for such fraud, disproportionately affecting students, low-income families, and military personnel.

(16) The practices regulated by this Act constitute unfair methods of competition, unfair or deceptive acts or practices, or fraudulent conduct that cause substantial harm to Arizona consumers and businesses, requiring targeted state intervention.

(b) The purposes of this Act are to:

(1) Protect Arizona consumers and businesses from digital and telephone fraud, deception, and unfair practices in online markets.

(2) Combat telephone fraud, robocalls, and caller ID spoofing that target Arizona residents through fraudulent means.

(3) Prohibit deceptive telemarketing practices that disguise commercial intent or require consumers to call back to obtain basic information through fraudulent or deceptive means.

(4) Establish clear responsibilities for digital platforms and telephone service providers to implement reasonable fraud prevention measures.

(5) Ensure that digital platforms which facilitate connections between users implement reasonable measures to authenticate user identities and prevent their services from being used as a conduit for scams that occur off-platform.

(6) Prohibit unfair methods of competition and unfair or deceptive acts or practices in digital markets and traditional media in Arizona, with particular focus on fraudulent and deceptive conduct.

(7) Establish clear standards of conduct for dominant digital platforms, media entities, and AI content creators operating in Arizona regarding fraudulent and deceptive practices.

(8) Protect Arizona businesses from exploitative practices when dependent on dominant platforms through fraudulent or deceptive means.

(9) Ensure transparency in paid content, political advertising, material connections, and AI-generated content that influence digital and traditional media to prevent deception.

(10) Protect platform integrity by requiring reasonable measures against bots, coordinated harassment, advertising fraud, and deceptive AI-generated content that facilitate fraud.

(11) Prevent deceptive naming, labeling, and meaningless differentiation in both digital and physical commerce that mislead consumers.

(12) Ensure transparency and accountability for generative AI content creation and publication to prevent deception and fraud.

(13) Provide enhanced protections for vulnerable populations, including seniors and rural residents, from fraudulent and deceptive practices.

(14) Position Arizona as a national leader in comprehensive fraud prevention and consumer protection.

(15) Promote transparency, accountability, and competitive markets for the benefit of Arizona consumers and businesses while respecting constitutional protections.

Section 103. Definitions

As used in this Act:

(1) "Advertising fraud" means the deliberate delivery of advertisements to invalid traffic or the artificial inflation of advertising metrics through fraudulent means, including but not limited to bot traffic, click farms, or coordinated artificial engagement.

(2) "Algorithmic ranking system" means any computational process, including those using machine learning or artificial intelligence, that determines the relative visibility, prominence, or order of information presented to users on a digital platform.

(3) "Arizona-connected revenue" means revenue derived from sales, transactions, advertising, data monetization, or other economic activity involving Arizona residents or businesses, or where Arizona serves as a substantial market for the activity.

(4) "Artificial intelligence" or "AI" means a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments.

(5) "Certified authentication service" means any identity verification service that:

(A) has been certified by a nationally recognized standards body or the Attorney General as meeting minimum security and privacy standards;

(B) maintains appropriate data security protocols; and

(6) "Commercial content" means content that:

(A) promotes or offers a product, service, or business for sale or transaction;

(B) is created by or on behalf of a business entity for commercial purposes;

(D) facilitates commercial transactions between users.

This term does not include:

(i) user-generated content not created for commercial purposes;

(ii) news reporting or journalistic content;

(iii) political speech;

(iv) educational or artistic content; or

(v) personal communications between users.

(7) "Caller ID authentication" means the process by which the telephone network verifies that the caller ID information transmitted with a call matches the caller's actual phone number, using frameworks such as STIR/SHAKEN or equivalent technology.

(8) "Connection platform" means any digital platform whose primary function is to facilitate transactions, communications, or the exchange of contact information between two or more users, including but not limited to online marketplaces, job recruitment boards, freelance service platforms, rental and real estate listing services, peer-to-peer service directories, and dating applications that provide one user with the contact information of another user as part of its service.

(9) "Content creator" means any individual or entity that produces and publishes content on a digital platform or through traditional media, including but not limited to:

(A) influencers, bloggers, vloggers, podcasters, and social media personalities;

(B) reviewers, critics, and commentators;

(D) entertainment or artistic content producers;

(E) news or journalistic content producers operating through digital or traditional media.

(10) "Coordinated inauthentic behavior" means networks of accounts, automated or human-operated, working together to:

(A) artificially amplify or suppress content for fraudulent purposes;

(B) engage in harassment or abuse campaigns;

(D) create false impressions of popularity or consensus to deceive users.

(11) "Covered media entity" means any entity that distributes content through traditional media channels (television, radio, print) or sells physical products in Arizona and meets either of the following criteria:

(A) has annual Arizona-connected revenue exceeding $5,000,000; or

(B) reaches more than 100,000 Arizona residents monthly through its media distribution.

(12) "Deceptive naming or labeling" means the use of names, labels, certifications, or descriptors that:

(A) falsely imply membership in, adherence to, or certification by a recognized industry, professional, or ethical standard-setting body;

(B) use terms that have established meanings in an industry or field in ways that mislead reasonable consumers about material characteristics;

(C) claim features, qualities, or benefits that are either non-existent or that do not meaningfully distinguish the product/service from competitors' offerings;

(D) use subjective qualifiers without objective criteria and without corresponding superior quality, features, or service levels.

(13) "Digital platform" means any public-facing online service that facilitates interactions between users, including social media platforms, e-commerce marketplaces, search engines, content sharing platforms, video sharing platforms, and connection platforms, that has either:

(A) more than 1,000,000 monthly active users in Arizona; or

(B) annual Arizona-connected revenue exceeding $25,000,000.

(14) "Digital platform with limited Arizona presence" means any digital platform that:

(A) has fewer than 100,000 monthly active users in Arizona;

(B) has annual Arizona-connected revenue under $5,000,000; and

(15) "Dominant digital platform" means a person that meets any of the following criteria:

(A) has maintained a market share exceeding 60 percent in any relevant Arizona digital market for three consecutive calendar years; or

(B) serves as an essential trading partner for at least 10,000 Arizona-based businesses that individually derive 25 percent or more of their gross revenue through such platform; or

(C) has annual Arizona-connected revenue exceeding $100,000,000 and operates a multi-sided digital marketplace that serves as a critical trading platform for Arizona commerce.

(16) "Financial services integration" means a dominant digital platform offering or controlling payment processing, funds transfer, lending, banking, insurance, or other financial services to or for platform-dependent businesses.

(17) "Fraudulent conduct" means conduct involving intentional deception for personal gain or to cause loss to another, including but not limited to:

(A) making false representations;

(B) concealing material facts;

(D) engaging in schemes to obtain money, property, or services through deception.

(18) "Generative artificial intelligence" means any artificial intelligence system that creates original text, images, audio, video, or other content in response to prompts, including but not limited to:

(A) large language models;

(B) image generation models;

(D) code generation models;

(E) any system that creates synthetic media or deepfakes.

(19) "Geographically isolated market" means any county with a population density of fewer than 100 persons per square mile or any municipality with a population of fewer than 20,000 persons that is more than 30 miles from a municipality with a population of 50,000 or more.

(20) "High-reach content creator" means a content creator who meets any of the following criteria on a dominant digital platform or through traditional media with Arizona reach:

(A) has more than 100,000 followers, subscribers, or regular viewers in Arizona;

(B) generates content that regularly receives more than 1,000,000 monthly views/impressions in Arizona;

(D) as defined by rule by the Attorney General based on evolving metrics and market realities.

(21) "Invalid traffic" means traffic that does not meet criteria for legitimate human engagement with digital content or advertising, including but not limited to:

(A) automated bot traffic;

(B) traffic from click farms or coordinated artificial engagement;

(D) traffic known to originate from data centers, VPNs, or proxy services used primarily for fraudulent purposes.

(22) "Material connection" means any relationship that might materially affect the weight or credibility of content, including but not limited to:

(A) employment relationship;

(B) compensation or payment;

(D) equity or ownership interest;

(E) family or personal relationship;

(F) any other connection that a reasonable person would expect to be disclosed to avoid deception.

(23) "Paid content" means any content on a digital platform, traditional media outlet, or other communication channel for which compensation or other valuable consideration is provided, directly or indirectly, to the content creator, publisher, or distributor, including but not limited to:

(A) sponsored posts, articles, or reviews;

(B) influencer marketing content;

(D) affiliate marketing content;

(E) any other content where a material connection exists between the content creator and a product, service, or brand being discussed.

(24) "Physical product" means any tangible good sold, distributed, or offered for sale in Arizona, including products sold through both digital and traditional retail channels.

(25) "Platform-dependent business" means an Arizona business entity that meets either of the following criteria:

(A) derives 25 percent or more of its gross revenue from transactions conducted through a single dominant digital platform; or

(B) has made substantial, platform-specific investments exceeding $25,000 in developing its presence, operations, or customer relationships on a dominant digital platform.

(26) "Political organization" means any entity whose primary purpose includes influencing elections, legislation, or public policy, including but not limited to:

(A) political action committees (PACs);

(B) campaign committees;

(D) 501(c)(4) social welfare organizations engaged in political activity;

(E) political parties and party committees;

(F) any other entity required to report political spending under state or federal law.

(27) "Presumptively unfair practice" means any practice described in Section 201(b) that creates a rebuttable presumption of unfair competition when engaged in by a dominant digital platform, covered media entity, or entity using generative AI.

(28) "Protected industry designation" means terms, certifications, or labels that imply adherence to established industry standards, ethical codes, or professional requirements, including but not limited to:

(A) professional licensure terms (e.g., "certified," "licensed," "accredited");

(B) industry association memberships;

(D) quality standard designations (e.g., "FDA-approved," "ISO certified").

(29) "Reasonable authentication measures" means methods for verifying user identity that are:

(A) proportionate to the risks and value of transactions facilitated by the platform;

(B) implemented in good faith to prevent fraudulent activity;

(D) as defined by rule by the Attorney General, which may include safe harbors for using certified authentication services.

(30) "Robocall" means any telephone call that delivers a prerecorded or artificial voice message, except calls:

(A) made for emergency purposes;

(B) not made for a commercial purpose;

(D) made by or on behalf of a tax-exempt nonprofit organization.

(31) "Rural business" means a business with its primary physical location in a geographically isolated market.

(32) "Rural small business" means a rural business with fewer than 50 employees and annual revenue under $1,000,000.

(33) "Self-preferencing" means using control over search, ranking, marketplace design, or other platform functions to systematically favor the platform's own products, services, or affiliates over those of unaffiliated platform-dependent businesses in a manner that substantially lessens competition or deceives consumers.

(34) "Spoofed call" means any telephone call where the caller intentionally transmits misleading or inaccurate caller identification information with the purpose of deceiving, defrauding, or causing harm to the recipient.

(35) "Subsidiary relationship" exists when:

(A) one entity controls, is controlled by, or is under common control with another entity; or

(B) entities share common ownership exceeding 20%; or

(36) "Telephone solicitation" means any unsolicited telephone call initiated for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.

(37) "Traditional media" means television, radio, print publications, broadcast media, and other non-digital communication channels that reach Arizona residents.

(38) "Transaction data" means data generated by or related to financial transactions conducted through or in connection with the platform, including but not limited to: sales volumes, pricing information, customer information, payment methods, timing data, and chargeback or dispute information.

(39) "User" means any individual who accesses or uses a digital platform.

(40) "Voice service provider" means any entity that provides commercial voice services to Arizona residents, including traditional telephone service, interconnected VoIP service, and wireless voice service.

Section 104. Relationship to Other Laws

(a) The provisions of this Act are in addition to, and not in lieu of, any other law of this state. Nothing in this Act shall be construed to limit rights or remedies available under Arizona's antitrust laws (Title 44, Chapter 10), consumer protection laws, or any other provision of law.

(b) Conduct that violates federal antitrust laws shall be deemed to violate this Act. This Act shall be construed to complement, and not conflict with, federal antitrust laws to the extent consistent with this Act's purposes.

(c) If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the Act that can be given effect without the invalid provision or application.

(d) Nothing in this Act shall be construed to require or authorize any action that would violate the First Amendment to the United States Constitution or Article 2, Section 6 of the Arizona Constitution. This Act shall be construed to avoid constitutional conflicts to the maximum extent possible.

(e) Nothing in this Act shall be construed to conflict with or be preempted by Section 230 of the Communications Decency Act (47 U.S.C. § 230). This Act regulates entities' own conduct and business practices, not their treatment of third-party content, except where such regulation targets fraudulent or deceptive practices as defined herein.

(f) Nothing in this Act shall be construed to require any entity to carry, promote, or distribute any particular content or to interfere with good faith editorial discretion exercised consistent with published, content-neutral policies.

(g) To the extent any provision of this Act conflicts with federal law, including but not limited to regulations of the Federal Communications Commission or Federal Trade Commission, federal law shall control to the extent of the conflict, and such provision shall be interpreted to avoid conflict to the maximum extent possible.

(h) If any provision of this Act relating to algorithmic transparency, content visibility, or editorial discretion is held invalid on First Amendment grounds, such invalidity shall not affect the validity of:

(1) provisions regulating fraudulent or deceptive commercial practices under this Act;

(2) provisions requiring reasonable authentication measures to prevent fraud;

(3) provisions protecting workers from exploitation; or

(4) provisions preventing clearly deceptive or fraudulent conduct.

The Legislature declares that these provisions are severable and independently enforceable.

(i) If any provision relating to artificial intelligence content disclosure or management is held invalid on constitutional or preemption grounds, such invalidity shall not affect the validity of:

(1) provisions prohibiting clearly fraudulent uses of AI-generated content;

(2) provisions requiring reasonable measures to prevent AI-facilitated fraud; or

(3) other consumer protection provisions focused on preventing fraud and deception.

The Legislature declares these provisions are severable and independently enforceable.

ARTICLE 2: STANDARDS OF CONDUCT

Section 201. General Standards

(a) It is an unfair method of competition and an unfair or deceptive act or practice under Arizona law for any dominant digital platform, covered media entity, or entity using generative AI in Arizona commerce to engage in conduct that has the foreseeable effect of:

(1) Substantially lessening competition in any Arizona market through exclusionary, predatory, or deceptive practices;

(2) Unfairly exploiting the economic dependence of Arizona businesses through deceptive or fraudulent means; or

(3) Engaging in fraudulent or deceptive practices that harm Arizona consumers or businesses.

(b) The following practices, when engaged in by a dominant digital platform, covered media entity, or entity using generative AI, are designated as "presumptively unfair practices" that create a rebuttable presumption of unfair competition.

Section 202. Specific Presumptively Unfair Practices

(a) Deceptive self-preferencing. Using control over platform design, search, ranking, or other functions to systematically and deceptively favor the platform's own products, services, or affiliates over those of unaffiliated platform-dependent businesses without clear and conspicuous disclosure that would enable reasonable consumers to understand the material connection, where such self-preferencing has the effect of substantially lessening competition.

(b) Restrictive and deceptive data practices. Using transaction data or other non-public data generated by platform-dependent businesses to compete against them in a deceptive manner, or restricting reasonable data portability in a manner that deceptively locks in businesses, where such practices have the effect of substantially lessening competition.

(c) Retroactively harmful changes implemented deceptively. Making material changes to terms, fees, or policies that substantially harm platform-dependent businesses without providing at least 90 days' notice and a meaningful opportunity to adjust business operations, where such changes are implemented in a deceptive manner or breach reasonable expectations created by the platform.

(d) Exclusionary contracting through deceptive means. Requiring platform-dependent businesses to use the platform exclusively, or imposing terms that effectively foreclose multi-homing through deceptive means or misrepresentation, unless the platform can demonstrate such exclusivity is necessary for technical integration or security and this necessity is clearly disclosed.

(e) Vertical integration conflicts involving deception. Operating both an essential marketplace and competing directly on that marketplace against platform-dependent businesses while deceptively using non-public data or platform control to gain unfair advantage, without implementing and maintaining effective firewalls to prevent deceptive self-preferencing and data misuse.

(f) Deceptive tying arrangements. Requiring platform-dependent businesses to use the platform's ancillary services (payment processing, advertising, logistics, etc.) as a condition of accessing the core marketplace through deceptive means or without clear disclosure of alternatives.

(g) Financial services integration abuse involving deception. Using control over payment processing or other financial services integrated with a dominant platform to:

(1) extract excessive fees from platform-dependent businesses through deceptive means;

(2) delay or restrict access to funds without legitimate risk justification and clear disclosure;

(3) leverage financial services to force adoption of other platform services deceptively; or

(4) use transaction data from financial services to gain competitive advantages over platform-dependent businesses deceptively.

(h) Deceptive manipulation of commercial content visibility. Intentionally and deceptively reducing the visibility of lawful commercial content through undisclosed algorithmic manipulation based on criteria unrelated to user preferences or engagement metrics, where such manipulation materially harms businesses without their knowledge or consent and where the content is clearly commercial content as defined in Section 103(6).

(i) Discriminatory terms of service enforcement applied deceptively. Applying platform rules, policies, or terms in a manner that creates systematic, deceptive disparities affecting certain classes of commercial users without reasonable, transparent justification, where such enforcement has anti-competitive effects.

(j) Undisclosed paid content and native advertising. Failing to clearly and conspicuously disclose paid content, native advertising, influencer marketing, or other content where a material connection exists between the content creator and the subject matter, including disclosure of subsidiary relationships between content creators and product/service providers, in a manner that deceives consumers about the nature of the content.

(k) Undisclosed political organization funding. Failing to clearly and conspicuously disclose when content is funded or supported by a political organization, including disclosure of the organization's name and the nature of its involvement, in a manner that deceives consumers about the source and purpose of the content.

(l) Failure to maintain reasonable platform integrity measures against fraud. Failing to implement and maintain reasonable, proportionate measures to detect and prevent:

(1) invalid traffic and advertising fraud that harms Arizona businesses;

(2) coordinated inauthentic behavior and bot networks that facilitate harassment or fraud;

(3) coordinated harassment campaigns that target Arizona residents or businesses; and

(4) other artificial manipulation of platform metrics or user experiences for fraudulent purposes.

(m) Deceptive naming and labeling practices. Using names, labels, certifications, or descriptors that:

(1) falsely imply adherence to recognized industry standards or professional requirements;

(2) use terms with established meanings in misleading ways that deceive consumers;

(3) claim non-existent or meaningless distinguishing features that deceive consumers; or

(4) use subjective qualifiers without objective criteria and without corresponding superior quality, in a manner that deceives consumers.

(n) Deceptive product claims in traditional media. Covered media entities distributing content that makes product or service claims without:

(1) clear distinction between advertising and editorial content that would enable reasonable consumers to identify commercial content;

(2) reasonable substantiation for material claims;

(3) disclosure of material limitations or conditions that would affect consumer decisions; or

(4) clear identification of commercial sponsors, in a manner that deceives consumers.

(o) Failure to implement reasonable telephone fraud prevention. As a voice service provider, knowingly or negligently failing to:

(1) implement caller ID authentication using STIR/SHAKEN or equivalent technology as required by federal law;

(2) provide free, effective call-blocking tools to Arizona consumers;

(3) implement systems to identify and block patterns consistent with illegal robocall campaigns; or

(4) cooperate with law enforcement investigations of illegal spoofing, where such failure facilitates fraudulent calls to Arizona residents.

(p) Deceptive telemarketing practices. Engaging in commercial telephone calls that:

(1) fail to immediately identify the originating business and purpose in a clear, non-deceptive manner;

(2) use call-back schemes requiring recipients to call other numbers for basic information as part of a deceptive scheme;

(3) use greetings that deceptively disguise commercial intent;

(4) fail to provide valid customer service contact; or

(5) use local number spoofing to deceptively appear as neighbors when calling from out of state.

(q) Failure to implement reasonable connection platform user authentication against fraud. As a connection platform, knowingly or negligently failing to implement reasonable identity authentication measures before providing a user with the contact information of another user or enabling direct, unmonitored communication between users that reveals personal contact information, where such failure facilitates fraudulent activity targeting Arizona residents.

(r) Deceptive use of AI-generated content. A dominant digital platform, covered media entity, content creator, business, or any entity using generative AI in Arizona commerce shall be presumed to engage in unfair competition if it deceptively uses AI-generated content, including:

(1) Failure to disclose materially deceptive AI-generated content: Failing to clearly and conspicuously disclose when content is AI-generated or materially enhanced by AI in circumstances where such disclosure is necessary to prevent consumer deception, including:

(A) text content created or substantially modified by AI that makes factual claims;

(B) images, video, or audio generated or altered by AI that could reasonably be mistaken for authentic human-created content;

(D) AI-generated reviews, testimonials, or endorsements;

(2) Failure to prevent fraudulent AI-generated claims: Failing to implement reasonable measures to prevent AI from generating clearly fraudulent or deceptive claims, including:

(A) health, medical, or safety claims without verification;

(B) financial or investment advice that is fraudulent;

(D) professional or technical advice requiring expertise that is fraudulent;

(E) product performance or efficacy claims that are false or unsubstantiated;

(3) Failure to prevent AI-generated deception: Failing to implement reasonable measures to prevent:

(A) AI-generated fake reviews or testimonials intended to deceive consumers;

(B) AI-generated impersonation of real people or organizations without consent for fraudulent purposes;

(D) AI-generated false endorsements or affiliations;

(E) AI-generated deceptive comparative claims;

(4) Failure to address illegal AI-generated content: Failing to implement reasonable measures to prevent AI from generating content that:

(A) violates copyright law;

(B) constitutes defamation or libel;

(D) facilitates illegal activities;

(E) violates intellectual property rights;

(5) Deceptive use of AI in commercial contexts: Using AI to deceptively:

(A) generate fake reviews, testimonials, or endorsements;

(B) impersonate real individuals without explicit consent for commercial gain;

(D) generate deceptive comparative claims against competitors;

(E) create content that violates intellectual property rights deceptively;

(F) generate content for illegal activities or fraud;

(6) Enhanced safe harbor for good faith compliance: An entity shall not be liable under this section if it:

(A) makes reasonable, good faith efforts to disclose AI-generated content in a manner that would prevent consumer deception;

(B) implements reasonable systems to prevent fraudulent AI-generated claims;

(D) cooperates with investigations of AI-generated fraud; and

(E) utilizes certified authentication services or other industry-recognized methods for preventing AI-facilitated fraud.

(s) Transparency in commercial algorithmic systems. A dominant digital platform shall provide clear, accessible explanations of how its algorithmic ranking systems affect the visibility of commercial content, including:

(1) the main factors considered in ranking decisions;

(2) how commercial content is treated differently from non-commercial content;

(3) options available to businesses to improve their content's visibility through legitimate means; and

(4) processes for addressing errors or disputes regarding content visibility.

This provision requires transparency only and does not dictate specific algorithmic outcomes or interfere with editorial discretion. If this provision is held invalid, it shall be severed from the Act without affecting other provisions.

Section 203. Rebutting Presumptions

(a) A dominant digital platform, covered media entity, or entity using generative AI may rebut a presumption established under Section 202 by demonstrating, by clear and convincing evidence, that the challenged practice:

(1) Does not involve deception, fraud, or anti-competitive effects as defined in this Act;

(2) Creates significant pro-competitive efficiencies that cannot be achieved through materially less restrictive alternatives and that are clearly disclosed to affected parties;

(3) Results in substantial, verifiable consumer benefits that demonstrably outweigh any anti-competitive or deceptive effects and that are not achieved through deceptive means; and

(4) Is reasonably necessary for the entity's legitimate business objectives, not merely commercially convenient, and is implemented in a transparent, non-deceptive manner.

(b) In evaluating whether a presumption has been rebutted, relevant factors include but are not limited to:

(1) Whether the practice involves deception or fraud as defined in this Act;

(2) The availability of less restrictive, non-deceptive alternatives to achieve the same legitimate objectives;

(3) The impact on innovation by the entity and by third parties;

(4) The effect on quality, variety, and price of goods and services for Arizona consumers;

(5) The impact on business and employment opportunities in Arizona;

(6) Whether the practice is clearly disclosed to affected parties;

(7) The overall effect on consumer welfare, with particular attention to preventing deception and fraud.

ARTICLE 3: TRANSPARENCY AND DISCLOSURE REQUIREMENTS

Section 301. Annual Transparency Report

(a) Every dominant digital platform, covered media entity, and entity significantly using generative AI in Arizona commerce shall annually prepare and submit to the Attorney General a Transparency Report containing data relevant to compliance with this Act, including:

(1) User and business metrics (monthly active users, business partners, content creators) relevant to Arizona operations;

(2) Fee and commission structures for services offered to Arizona consumers and businesses;

(3) Data practices policies and data portability options available to Arizona users;

(4) Complaint and dispute resolution statistics involving Arizona residents;

(5) Self-preferencing practices and justifications as they affect Arizona businesses;

(6) Political and paid content disclosure compliance statistics for Arizona-connected content;

(7) Platform integrity measures against bots and fraud affecting Arizona users;

(8) Telephone fraud prevention measures and outcomes for Arizona residents;

(9) Connection platform user authentication systems and effectiveness in preventing fraud against Arizona users;

(10) Deceptive telemarketing prevention and enforcement regarding Arizona numbers;

(11) Rural and vulnerable population protection programs;

(12) AI content transparency reporting: For entities using or hosting generative AI content, annual disclosure of:

(A) volume of AI-generated content created or hosted that targets Arizona residents;

(B) AI disclosure compliance rates and enforcement actions;

(D) AI-related consumer complaints from Arizona residents and resolution outcomes;

(E) investments in AI content detection, verification, and safety systems;

(F) coordination with AI developers, researchers, and standards bodies on preventing AI fraud;

(G) incidents of AI-generated deception, fraud, or legal violations affecting Arizona residents;

(H) AI content audit trail maintenance and accessibility.

(b) The Attorney General may require additional information through rulemaking as needed to assess compliance with this Act's provisions regarding fraudulent and deceptive practices.

Section 302. Terms of Service and Policy Transparency

(a) Dominant digital platforms shall provide at least 90 days' notice of material changes to terms of service, fees, or policies that affect platform-dependent businesses in Arizona.

(b) Notice shall be provided in writing and include:

(1) a clear description of the changes;

(2) the rationale for the changes;

(3) the effective date; and

(4) information about appeal or adjustment processes.

(c) For changes that would materially harm platform-dependent businesses, platforms shall provide affected Arizona businesses with the opportunity to terminate their relationship without penalty during the notice period.

Section 303. Arizona Digital Markets Ombudsman

(a) There is established within the Attorney General's office the position of Arizona Digital Markets Ombudsman.

(b) The Ombudsman shall:

(1) receive and investigate complaints from Arizona businesses and consumers regarding practices covered by this Act;

(2) provide mediation and dispute resolution services;

(3) educate businesses and consumers about their rights under this Act;

(4) make recommendations to the Attorney General regarding enforcement priorities; and

(5) issue annual reports on complaint trends and resolution outcomes.

ARTICLE 4: ENFORCEMENT AND REMEDIES

Section 401. Enforcement Authority

(a) The Attorney General shall have primary authority to enforce this Act.

(b) The Attorney General may:

(1) investigate potential violations;

(2) issue subpoenas and civil investigative demands;

(3) bring civil actions for injunctive relief and civil penalties;

(4) enter into assurances of discontinuance or consent judgments; and

(5) issue guidance on compliance with this Act.

(c) The Attorney General shall establish a dedicated unit for enforcement of this Act, with specialized expertise in digital markets, AI technology, telecommunications, and traditional media.

Section 402. Private Right of Action

(a) Any Arizona consumer, business, worker, or other person injured by a violation of this Act may bring a civil action for:

(1) Actual damages or statutory damages, whichever is greater;

(2) Treble damages for willful violations involving deception or fraud;

(3) Injunctive relief to prevent further violations; and

(4) Reasonable attorney's fees and costs for prevailing plaintiffs.

(b) Class actions may be maintained in accordance with the Arizona Rules of Civil Procedure for violations affecting multiple persons.

Section 403. Procedural Provisions

(a) In any action alleging a violation of Section 202, the plaintiff shall establish that the defendant is a dominant digital platform, covered media entity, or entity using generative AI, and that the challenged practice falls within the scope of Section 202.

(b) Once these elements are established, the burden shifts to the defendant to rebut the presumption of unfair competition under the standards of Section 203.

(c) No person shall require another person to waive rights under this Act as a condition of using a digital platform, and any such waiver shall be void as against public policy.

Section 404. Remedies

(a) Injunctive relief. The court may order any equitable relief reasonably necessary to prevent fraudulent or deceptive practices or restore competitive conditions, including but not limited to:

(1) Prohibition of specific deceptive or fraudulent practices;

(2) Modification of contractual terms to eliminate deceptive provisions;

(3) Appointment of monitors to oversee compliance with fraud prevention measures;

(4) Establishment of transparent disclosure systems;

(5) Implementation of reasonable fraud prevention measures;

(6) Creation of connection platform user authentication systems to prevent fraud;

(7) Implementation of telemarketing compliance systems;

(8) Establishment of rural protection programs;

(9) AI transparency requirements: Requiring entities to implement reasonable systems to disclose AI-generated content where necessary to prevent deception;

(10) AI fraud prevention orders: Requiring entities to implement reasonable measures to prevent fraudulent use of AI-generated content;

(11) Content correction orders: Requiring correction of demonstrably false or deceptive content, limited to factual claims in commercial contexts;

(b) Restitution and disgorgement. The court may order restitution to injured parties and disgorgement of ill-gotten gains obtained through violations of this Act involving deception or fraud.

(1) For violations involving deceptive self-preferencing or data misuse: up to 10% of Arizona-connected revenue from affected products/services;

(2) For violations harming platform-dependent businesses through deceptive means: up to $50,000 per affected business;

(3) For violations affecting workers: up to $10,000 per affected worker plus back pay and benefits;

(4) For deceptive labeling violations: up to $25,000 per product or service;

(5) For traditional media deception violations: up to $100,000 per violation;

(6) For telephone fraud prevention violations: up to $10,000 per violation;

(7) For connection platform authentication failures facilitating fraud: up to $5,000 per violation;

(8) For deceptive telemarketing: up to $2,500 per violation;

(9) For deceptive use of AI-generated content:

(A) for failure to disclose AI-generated content where such disclosure is necessary to prevent deception: up to $10,000 per violation;

(B) for AI-generated deception or fraud: up to $50,000 per violation or 200% of ill-gotten gains;

ARTICLE 5: IMPLEMENTATION AND MISCELLANEOUS

Section 501. Rulemaking Authority

The Attorney General, in consultation with relevant state agencies, may adopt rules and regulations necessary to implement this Act, including:

(a) Standards for determining market dominance and economic dependence;

(b) Guidelines for data portability and interoperability to prevent deceptive lock-in;

(d) Standards for transparency in algorithmic systems affecting commercial content;

(e) Guidelines for preventing deceptive self-preferencing;

(f) Disclosure requirements for paid content and native advertising to prevent deception;

(g) Political funding disclosure standards to prevent deception;

(h) Platform integrity requirements against bots and fraud;

(i) Deceptive labeling prevention standards;

(j) Traditional media advertising transparency requirements to prevent deception;

(k) Physical product claim verification standards;

(l) Telephone fraud prevention requirements;

(m) Connection platform user authentication standards to prevent fraud;

(n) Telemarketing compliance requirements to prevent deception;

(o) Rural and vulnerable population protection programs;

(p) Worker compensation and expense reimbursement standards;

(q) Complaint and dispute resolution procedures;

(r) Reporting requirements for annual transparency reports;

(s) Graduated compliance timelines for different entity sizes;

(t) Technical assistance programs for small businesses;

(u) Coordination with federal and international standards;

(v) AI content disclosure standards: Establishing standards for disclosing AI-generated content where such disclosure is necessary to prevent consumer deception, with flexibility in methods of disclosure;

(w) AI fraud prevention protocols: Developing requirements for preventing fraudulent use of AI-generated content targeting Arizona residents;

(x) Cross-technology integration standards: Ensuring consistency across digital platforms, traditional media, and emerging technologies in preventing deceptive practices;

(y) Certification standards for authentication services: Establishing standards for certifying third-party authentication services that qualify for safe harbor protections;

(z) Precise definitions and examples: Providing specific examples of compliant and non-compliant conduct to ensure clarity and notice;

(aa) Small platform exemptions: Defining specific exemptions and accommodations for digital platforms with limited Arizona presence;

(bb) Specific fraud pattern definitions: Identifying and defining specific fraud patterns common in Arizona, including romance scams, employment fraud, and rental scams, to provide clear guidance on prohibited conduct.

Section 502. Severability

(a) If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the Act that can be given effect without the invalid provision or application.

(b) Notwithstanding subsection (a), the following severability triggers shall apply:

(1) If Section 202(s) (algorithmic transparency) is held invalid on First Amendment grounds: Such invalidity shall not affect:

(A) Sections 202(q) and (r) regarding fraud prevention and authentication;

(B) Article 3 regarding worker protections;

(D) Sections 202(m) and (n) regarding deceptive labeling and traditional media.

(2) If any provision of Section 202(r) (AI-generated content) is held invalid: Such invalidity shall not affect:

(A) Sections 202(l) and (q) regarding platform integrity and authentication;

(B) Sections 202(j) and (k) regarding disclosure requirements; or

(3) If any provision relating to content moderation or editorial discretion is held invalid: Such invalidity shall not affect provisions specifically regulating fraudulent or deceptive commercial practices.

(c) The Legislature declares that the provisions of this Act are severable to the maximum extent possible, with particular emphasis on preserving provisions that prevent fraud and deception, protect workers, and ensure basic consumer protections.

Section 603. Coordination with Existing Laws

(a) This Act establishes minimum standards of conduct regarding fraudulent and deceptive practices. Entities may adopt additional protective measures.

(b) Compliance with this Act does not relieve entities of obligations under other Arizona or federal laws.

(c) In case of conflict between this Act and federal law, federal law controls to the extent of the conflict, and such provisions shall be interpreted to avoid conflict to the maximum extent possible.

(d) This Act shall be coordinated with existing Arizona consumer protection laws to ensure complementary enforcement, with particular focus on preventing fraud and deception.

(e) Nothing in this Act shall be construed to limit or interfere with platforms' good faith efforts to restrict content that is obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable under 47 U.S.C. § 230(c)(2).

Section 604. Graduated Implementation

(a) General exemptions for small platforms: Digital platforms with limited Arizona presence as defined in Section 103(14) shall be exempt from all requirements of this Act except:

(1) Section 202(p) regarding deceptive telemarketing if applicable; and

(2) Section 202(o) regarding telephone fraud prevention if applicable.

(b) For entities with Arizona-connected revenue under $10,000,000 but above the limited presence threshold, compliance deadlines shall be extended by 12 months from the effective date.

(c) Small businesses with fewer than 50 employees shall receive technical assistance from the Attorney General's office for compliance.

(d) Traditional media entities shall have 18 months from the effective date to implement systems for distinguishing advertising from editorial content to prevent deception.

(e) Physical product manufacturers shall have 24 months from the effective date to update labeling for compliance with deceptive labeling provisions.

(f) AI-specific implementation:

(1) Large AI developers and platforms (revenue > $100M): 18 months for full compliance;

(2) Medium entities (revenue $10M-$100M): 24 months for full compliance;

(3) Small entities and startups (revenue < $10M): 30 months for full compliance;

(4) High-risk AI uses (health, finance, legal): Additional 6 months for safety certification;

(5) Technical assistance program for small business AI adoption and compliance.

(g) Telephone service providers: 12 months for STIR/SHAKEN implementation as required by federal law.

(h) Connection platforms: 18 months for large platforms, 30 months for smaller platforms for reasonable user authentication systems to prevent fraud.

(i) Telemarketers: 9 months for registration and compliance systems to prevent deception.

Section 505. Annual Report to Legislature

The Attorney General shall submit an annual report to the Legislature on the implementation and enforcement of this Act, including:

(a) The number and nature of complaints received, categorized by issue type;

(b) Enforcement actions taken and outcomes achieved;

(d) Analysis of compliance by different entity types;

(e) Evaluation of AI regulation effectiveness in preventing deception and fraud;

(f) Recommendations for legislative updates based on technological developments;

(g) Coordination with federal and international regulatory efforts;

(h) Assessment of Arizona's competitive position in digital markets;

(i) Rural and vulnerable population protection program outcomes;

(j) Telephone fraud prevention and spoofing reduction statistics;

(k) Connection platform authentication effectiveness and fraud prevention;

(l) Traditional media and physical commerce compliance trends.

Section 506. Appropriation

There is appropriated from the state General Fund to the Attorney General the sum of $4,000,000 in fiscal year 2027-2028 for the implementation and enforcement of this Act, allocated as follows:

(a) $2,000,000 for enforcement of provisions preventing fraud and deception in digital markets;

(b) $750,000 for traditional media and physical commerce enforcement focused on deceptive practices;

(d) $250,000 for technical assistance to small businesses.

Section 607. Effective Date

This Act shall take effect on January 1, 2027, except that:

(a) The rulemaking provisions of Section 501 shall take effect on July 1, 2027;

(b) The first annual reports under Section 301 shall be due on March 1, 2029;

(d) Traditional media compliance under Section 202(n) shall begin July 1, 2029;

(e) Physical product labeling compliance under Section 202(m) shall begin January 1, 2030;

(f) AI content compliance:

(1) basic AI disclosure requirements where necessary to prevent deception: Effective July 1, 2028;

(2) AI fraud prevention requirements: Effective January 1, 2029;

(3) full AI audit trail requirements: Effective January 1, 2030;

(g) Telephone fraud prevention compliance: January 1, 2029;

(h) Connection platform authentication compliance: July 1, 2029 for large platforms, January 1, 2031 for smaller platforms;

(i) Telemarketing compliance: October 1, 2028;

(j) All other requirements take effect January 1, 2031.

fred slawson

Arizona Anti Dirty Dealing Act

Arizona Promise and Workforce Development Act

Arizona Free Market Act