The Rise of Deepfake Technology

As artificial intelligence (“AI”) continues to advance, one of its subfields, deepfake technology, is also garnering significant attention. Deepfake is a form of AI that can manipulate digital media, such as images, videos, and audio, to create highly realistic but fabricated content.

It is undeniable that the initial attention surrounding deepfakes has centered on their misuse in spreading disinformation, pornography, and perpetrating scams. For example, scammers generated deepfake robocalls using the voice of President Joe Biden earlier this year to discourage voters from voting, and additionally, a Hong Kong firm fell victim to a $25 million fraud scheme orchestrated through deepfake technology, wherein fraudsters impersonated the company’s chief financial officer during a video conference call. However, savvy businesses and organizations are also beginning to explore the transformative opportunities this technology presents for marketing and advertising campaigns. By harnessing the power of deepfakes, companies can tap into the star power and influence of renowned personalities without the need for their direct and active involvement, potentially revolutionizing the industry. As always, there are always two sides to a coin, and as with any emerging technology, there are legal considerations that companies and their general counsels must navigate carefully, and in this article, we aim to explore the use case of deepfake technology in marketing, legal concerns and best practices that general counsels should take into account.

What are Deepfakes?

Before we begin, it would be essential for us to understand what deepfakes are.

Deepfakes are a form of AI-generated synthetic media that employs deep learning algorithms to manipulate or fabricate images, videos, or audio recordings. These algorithms are trained on extensive datasets of real media, enabling them to learn and replicate a person’s face, voice, or mannerisms with remarkable precision. The resulting deepfake media can be virtually indistinguishable from genuine content, posing a challenge in discerning authenticity.

Currently, a simple online search for deepfakes reveals a staggering number of videos circulating on the internet, many of which viewers may not even realize are deepfakes.

The Business Case for Deepfakes in Marketing

Traditional celebrity endorsements and influencer collaborations can be prohibitively expensive, often requiring significant financial investments and complex negotiations, as traditional marketing, photoshoots, and video recordings necessitate the direct and active physical involvement of the celebrities and influencers in order to produce the desired content.

Deepfake technology now offers a cost-effective alternative, enabling companies to create compelling content featuring the likeness and voices of popular figures without the logistical hurdles and exorbitant costs associated with securing their participation.

This approach not only reduces marketing and advertising budgets but also opens up new avenues for creative storytelling and engaging campaigns, all without requiring the direct, actual, and active physical involvement of those celebrities and influencers as in traditional marketing and video shoots, which can be both time and resource-consuming. This democratizes access to star power, allowing smaller businesses and startups to compete on a more level playing field by leveraging the influence of renowned personalities without the financial constraints of traditional endorsement deals.

Legal Considerations and Best Practices for Businesses Utilizing Deepfakes

While the potential benefits of deepfakes in marketing are alluring, companies and their general counsels must exercise caution and address several legal considerations before employing this technology. The legal landscape surrounding deepfakes is still evolving, and here are the top five key legal concerns and best practices that should be taken into account:

1. Misrepresentation and Misleading Advertising: The use of deepfakes in advertising and marketing campaigns may be construed as misrepresentation or misleading advertising, especially if it is presented as a genuine endorsement or testimonial from a celebrity without proper disclosure and actual agreement by the celebrity. Therefore, companies should be transparent about the use of deepfake technology and ensure that their campaigns do not deceive or mislead consumers. Also, different jurisdictions may have specific regulations governing the use of deepfakes in advertising, which companies must carefully navigate to avoid legal violations and potential fines or penalties.
2. Data Protection and Privacy: Deepfakes typically involve processing and using personal data, such as an individual’s facial features, voice, or likeness, which can raise data protection concerns and potentially violate privacy laws if not handled properly. Therefore, any attempt to harness individuals’ personal data, whether influencers or celebrities, for deepfake purposes without their explicit consent not only risks legal repercussions but also undermines trust and integrity. In the era of stringent regulations like GDPR, companies must navigate deepfake territory with utmost caution, ensuring full compliance with local privacy laws. Securing explicit consent and adhering to relevant data protection laws are non-negotiable steps for businesses venturing into deepfake territory.
3. Intellectual Property Rights: Besides privacy concerns, it is also essential to recognize that unauthorized utilization of an individual’s likeness, voice, or image in deepfake media can constitute significant infringement upon intellectual property (“IP”) rights. Beyond privacy breaches, this includes potential violations of copyright, passing off, and trademarks infringement. Many jurisdictions also recognize a legal right of publicity, especially when it involves the likeness of celebrities, granting individuals control over the commercial use of their identity, and failure to obtain consent for these rights in deepfake media could result in legal repercussions. Therefore, companies must diligently secure all necessary rights and licenses from individuals before engaging in the creation or distribution of deepfake content, obtaining explicit consent for the use of their likeness, voice, or image, and ensuring compliance with relevant IP laws and regulations to mitigate the risk of potential disputes and legal liabilities.
4. Compliance with AI Laws and Regulations: With the emergence of AI regulations across various jurisdictions, it is imperative for companies to pay particular attention to the development of legislation governing the use of AI. Many jurisdictions are actively drafting and implementing their own regulations to address the ethical and legal implications of AI technologies, hence, staying abreast of these evolving regulations is essential to ensure compliance and shield businesses from accusations of deceptive practices. For instance, in certain jurisdictions, there is a requirement for companies to disclose the use of artificially generated or manipulated content, mandating transparency to prevent deception. Consequently, in marketing practices involving deepfakes, disclosure becomes paramount. Thus, companies must stay updated on AI-related laws and regulations, understanding the dos and don’ts to navigate this evolving landscape effectively.
5. Comprehensive Contractual Arrangements: Given the nascent and evolving nature of deepfake technology, it’s imperative for businesses to establish robust contractual agreements governing the licensing and authorization of individuals’ likeness, images, voices, and other personal attributes for deepfake purposes. These contracts should encompass a wide array of considerations such as (i) terms of use to clearly define the scope and limitations of the authorized use of the individual’s likeness, image, voice, etc., in deepfake content, (ii) licensing rights to specify whether the license is exclusive, non-exclusive, or limited in any way, and detail any royalties or compensation arrangements, (iii) ownership of IP rights to specify whether the license is exclusive, non-exclusive, or limited in any way, and detail any royalties or compensation arrangements, and (iv) limitation on the distribution channels or platforms of the deepfake content.

As deepfake technology continues to advance, it presents both immense opportunities and significant challenges for businesses. By leveraging the power of deepfakes in marketing campaigns, companies can unlock new frontiers of creativity, cost-efficiency, and brand engagement, by offering businesses a powerful tool for innovative marketing and advertising strategies. However, navigating the legal landscape surrounding deepfakes requires a proactive approach and close collaboration with legal professionals who specialize in emerging technologies and AI regulations.

As the technology continues to advance, companies should remain vigilant, seek legal counsel, and prioritize transparency and ethical practices in their use of deepfakes. By doing so, companies can leverage the potential benefits of this technology while mitigating risks and fostering trust with their customers and stakeholders.

If your organizationintends to leverage AI deepfake technology in your business, our team is poisedto provide expert assistance. Leveraging our proficiency in AI technology andlegal frameworks, we offer tailored guidance to safeguard your organization andensure compliance with legal standards. Contact us today to proactively addressthese critical considerations.

About the authors

Ong Johnson
Partner
Head of Technology Practice Group
Transactions and Dispute Resolution, Technology,
Media & Telecommunications, Intellectual Property,
Fintech, Privacy and Cybersecurity
johnson.ong@hhq.com.my

Lo Khai Yi
Partner
Co-Head of Technology Practice Group
Technology, Media & Telecommunications, Intellectual
Property, Corporate/M&A, Projects and Infrastructure,
Privacy and Cybersecurity
ky.lo@hhq.com.my.