The FTC is investigating companies that make AI companion chatbots (www.engadget.com)

The Federal Trade Commission (FTC) has launched a formal inquiry into seven companies developing AI companion chatbots, including Alphabet, Meta, OpenAI, and Character Technologies. While not yet a regulatory action, the investigation seeks to understand how these companies measure, test, and monitor the potentially harmful effects of chatbots on children and teens. The FTC is requesting details on AI character development, user engagement monetization, data privacy practices, and compliance with the Children’s Online Privacy Protection Act (COPPA). This probe highlights growing regulatory scrutiny over the social and ethical implications of AI companions, especially amid reports of chatbots encouraging suicidal thoughts and engaging in inappropriate conversations with minors. FTC Commissioner Mark Meador emphasized that, should evidence of legal violations emerge, the commission will act to protect vulnerable users. The inquiry underscores heightened concerns about privacy, mental health impacts, and the safety of AI interactions with young users—issues already prompting separate investigations by Texas authorities into companies like Character.AI and Meta AI Studio. For the AI/ML community, this marks a pivotal moment where ethical deployment and robust safety measures are becoming mandatory, not optional. It signals increased pressure to develop transparent, accountable AI systems that prioritize user well-being, particularly for minors, shaping future AI regulation and standards in conversational agents.