Snap shares fall as FTC refers MyAI chatbot complaint to DOJ

Snap Shares closed down 5% on Thursday after the Federal Trade Commission said it would refer a complaint against the company to the Justice Department.

The FTC’s non-public complaint includes allegations that Snapchat’s My AI chatbot “poses a risk and harm to young users,” the commission said in a statement. The complaint follows FTC compliance reviews of Snap in 2014. Settlement Regarding the allegations of public deception regarding the collection of information by the company.

According to the FTC’s compliance reviews of Snap, one party found it likely that the company was “violating or about to violate the law.”

“Processing is in the public interest,” the FTC said in a statement.

The FTC did not specify what the complaint about the My AI chatbot was focused on, but the chatbot has been the subject of investigations in the past.

In a statement to CNBC, a Snap spokesperson pushed back on the FTC’s claims.

“Unfortunately, on the last day of this administration, the divided FTC has decided to choose a complaint that does not consider any of these efforts, is based on errors, and lacks substantive evidence,” a Snap spokesperson said. “It also fails to identify any actual harm and is subject to serious First Amendment concerns.”

The spokesperson added that the company remains focused on ensuring the FTC’s “considered development of generative AI,” adding that Snap believes the complaint “destroys innovation and competition in a critical and growing economic sector.”

Snap launched its My AI chatbot in 2023. is it. Empowered It provides the ability to answer user questions with OpenAI and Google’s large language models and make recommendations similar to ChatGPT and other AI-powered chat tools.

The chatbot has been cited for providing problematic responses. In one instance, the chatbot explained how to mask the smell of alcohol and marijuana while talking to a reporter posing as a teenager, according to The Washington Post. reported In 2023. When the chatbot was first released, Snap he said. My AI, like other AI-powered chatbots, is “susceptible and can be manipulated into talking about anything.

In October 2013, the UK’s Information Commissioner’s Office issued a preliminary enforcement notice against Snap; to accuse The company’s My AI-related risk assessment “did not adequately assess the data protection risks posed by generative AI technology, particularly to children.”

Although the FTC said it had voted in closed session to make a public statement about the indictment against Snap and its recommendation to the DOJ, FTC commissioners Melissa Hallock and Andrew Ferguson were not present, he noted.

The FTC also pointed out An inconsistent statement In Ferguson, President-elect Donald Trump nominated Lena Kahn in December to replace her as the next FTC chair.

These types of referrals, Ferguson said, “are not disclosed until the complaint is filed and disclosed by the department or the commission.”

“I did not attend the farcical closed session where this matter was approved,” he wrote.

Ferguson added that he opposes the FTC’s complaint against Snap, but said that because the case is not public, he “cannot provide a detailed analysis of the many issues.” Ferguson wrote that the FTC’s interpretations of the law’s complaints are “erroneous” and “in direct conflict with First Amendment guarantees.”

If the DOJ files the complaint, Ferguson said, “it will provide a more detailed description of the violation of the Constitution and the rule of law.”

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