US Justice Department seeks privacy protections before Character.AI chats can be sold
As Character.AI goes through bankruptcy, the US Department of Justice is asking the court to appoint an independent consumer privacy ombudsman to advise on how any sale of millions of users' data should be regulated. The platform has 12 million monthly active users who spend an average of two hours a day in conversations with chatbot characters, often of a sensitive nature and sometimes involving minors. The DOJ's court filing notes that the company's privacy policy is "ambiguous" and leaves open the possibility of selling at least part of users' chat histories, even though the chatbot itself assures users it will not share anything without their explicit permission. The judge has the power to block the sale of this data. For any business wondering what happens to its customers' data if the AI vendor it relies on goes bankrupt, the case shows that a privacy policy is worth nothing unless someone defends it at the moment it matters most.
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