On November 26, 2024, the Federal Trade Commission (FTC) published a proposed settlement order for Evolv Technologies Holdings, Inc., for the alleged violation of Section 5(a) of the Federal Trade Commission Act (the FTC Act).

Background to the settlement

The FTC highlighted that Evolv provides a security screening system, Evolv Express, at the entrances of schools and other venues, and that Evolv made claims surrounding the use of artificial intelligence (AI), making its systems more accurate, efficient, and cost-effective than traditional metal detectors.

The FTC also noted the proposed order builds on Operation AI Comply initiated in September 2024.

Findings of the FTC

The FTC outlined that Evolv marketed its product as 'AI-driven,' 'AI-based,' 'AI-powered,' and using 'proven artificial intelligence' to spot potential threats. The FTC also noted that Evolv Express's system can use a higher sensitivity setting which may detect more potential weapons, but also alerts harmless personal items more frequently. Similar claims were made regarding the testing of the Evolv Express system by US and UK government agencies.

Accordingly, the FTC determined that Evolv represented, directly or indirectly, expressly or by implication that, among other things:

• Evolv Express will detect all weapons and ignore harmless personal items;
• Evolv Express will detect harmless personal items without requiring visitors to remove items from pockets or bags;
• Evolv Express screens visitors 10 times faster than metal detectors; and
• Evolve Express reduces labor costs by up to 70% compared to metal detectors.

However, the FTC held that the Evolv Express system failed in multiple instances to detect weapons and flagged harmless items. Following feedback from users of the Evolv Express system, the FTC noted that advice to add conveyor belts and other measures to divert the detection of harmless items makes the system similar to traditional metal detectors.

Accordingly, the FTC found Evolv to have violated Section 5(a) of the FTC Act for misrepresentations or deceptive omissions of material fact constituting deceptive acts or practices.

Outcomes

In light of the above violation, the FTC held that Evolv must notify certain K-12 school customers that they can opt to cancel contracts signed between April 1, 2022, to June 20, 2023.

The proposed order also prohibits Evolv from making misrepresentations about:

• testing or results of any testing of a product;
• any material aspects of a product's performance, efficacy, nature, or central characteristics, including the use of algorithms, AI, or other automated systems or tools;
• labor costs, including comparisons; and
• the ability to detect weapons and ignore harmless personal items.

You can read the press release here, the complaint here, and the proposed order here.