Snap CEO Evan Spiegel found himself in hot water as the Federal Trade Commission (FTC) decided to refer a complaint against Snap to the Department of Justice (DOJ). Snap shares took a hit, closing down by 5% after this announcement on September 17, 2024.
The FTC’s complaint revolves around Snapchat’s My AI chatbot, alleging that it poses risks and harms to young users. This complaint follows the FTC’s scrutiny of Snap’s behavior post a 2014 settlement concerning public deception related to data collection by the company.
FTC’s Allegations and Snap’s Response
The FTC’s non-public complaint suggests that Snap may be violating the law or is on the brink of doing so. Despite not specifying the exact concerns regarding the My AI chatbot, the FTC believes that a proceeding is in the public interest. Snap, however, refutes these claims, highlighting inaccuracies and a lack of concrete evidence in the FTC’s arguments. The company also emphasizes that the complaint could hinder innovation and competition in the AI sector.
Issues with the My AI Chatbot
Snap introduced the My AI chatbot in 2023, leveraging OpenAI and Google’s language models. While the chatbot can answer user queries and provide recommendations, it has been under scrutiny for offering problematic responses. For instance, it once advised a reporter pretending to be a teenager on how to conceal alcohol and marijuana smells, raising concerns about its appropriateness for younger users.
International Concerns and Dissent
The United Kingdom’s Information Commissioner’s Office also raised red flags about Snap’s My AI, suggesting that the company’s risk assessment did not adequately address data protection risks, especially for children. Additionally, the FTC’s decision to refer the complaint faced opposition from some members. Commissioner Andrew Ferguson, slated to become the next FTC chair, voiced dissent, citing concerns about the complaint’s alignment with the First Amendment.
In light of these developments, the DOJ’s response to the FTC’s referral will be crucial, shaping the future of Snap’s compliance and the broader implications for AI regulation. As stakeholders await further updates, the tech industry braces for potential shifts in regulatory scrutiny and enforcement mechanisms.
Life is full of surprises, and sometimes even the most well-established companies can find themselves entangled in legal battles. It serves as a reminder that adaptability and transparency are key in navigating complex regulatory landscapes. How do you think Snap should address the FTC’s concerns while fostering innovation and user safety? Share your thoughts and stay tuned for more updates on this unfolding story.
