Michigan joins lawsuit over chatbot privacy after bankruptcy filing

Michigan Attorney General Dana Nessel joined 38 other states and the District of Columbia in a lawsuit seeking consumer protections after Character.AI filed for bankruptcy. The platform announced the filing on Monday, stating it would sell $20 million in assets to Disney.

The lawsuit, filed Wednesday, outlines concerns identified in state investigations, including chatbots posing as licensed professionals, minors being exposed to explicit content, and insufficient age assurance practices. The attorneys general argue that current safety measures can be circumvented and do not fully address privacy or consumer protection laws.

The states require any purchaser of Character.AI to implement robust age-verification measures, remove characters portraying licensed professionals, and ensure consumers can access and delete their data before any sale. Nessel stated that voluntary safety measures are insufficient if they can be reversed by a new owner.

Read the full story at michiganadvance.com.