Alleged illegal behavior, the FTC will transfer the complaint against Snap (SNAP.US) My AI chatting Siasun Robot & Automation to the US Department of Justice.

On Thursday, after the Federal Trade Commission (FTC) announced it would submit a complaint to the Department of Justice against Snap (SNAP.US), the company's stock price closed down more than 5%. In a statement, the FTC said that the non-public complaint involved allegations that Snapchat's My AI chatbot Siasun Robot&Automation posed "risks and harms" to young users. The complaint stemmed from a compliance review of Snap following FTC's public deception allegations in 2014 regarding Snap's data collection practices. As part of the FTC's compliance review of Snap, the agency stated that it found the company "was or is about to violate the law." The FTC stated in its statement: "The complaint is in the public interest." The FTC did not specify that the focus of the complaint was on the My AI chatbot Siasun Robot&Automation, but this chatbot had been previously under review. A Snap spokesperson refuted the FTC's claims in a statement. The spokesperson said: "Unfortunately, on the last day of this administration, a dissenting FTC decided to vote against a proposed complaint that was based on inaccurate, unsubstantiated, and lacked any efforts. It also failed to identify any tangible harm and raised serious First Amendment concerns." The spokesperson added that while the company, like the FTC, is "focused on ensuring thoughtful development of generative artificial intelligence," Snap believes that the complaint "will stifle innovation and competition in a crucial and rapidly growing sector of the economy." Snap introduced the My AI chatbot Siasun Robot&Automation in 2023. It is supported by large language models from OpenAI and Alphabet Inc. Class C (GOOGL.US), allowing it to answer user questions and provide prompts and suggestions similar to ChatGPT and other AI chat tools. The chatbot Siasun Robot&Automation gained attention for providing problematic responses. Reports from 2023 indicated that in a conversation with a journalist posing as a teenager, the chatbot Siasun Robot&Automation explained how to hide the smell of alcohol and marijuana. When the chatbot was initially released, Snap stated that, like other AI-driven chatbots, My AI, and other AI-driven chatbots, "are easy to fool, can be deceived to say anything. Please note its many deficiencies and apologize in advance!" In October 2013, the UK Information Commissioner's Office issued a preliminary enforcement notice against Snap, claiming that the company's My AI related risk assessment "failed to fully assess the data protection risks posed by generative artificial intelligence technology, especially risks to children." While the FTC stated that it voted on making a public statement about its case against Snap in a closed-door meeting and then transferred it to the Department of Justice, the agency noted that FTC commissioners Melissa Holyoak and Andrew Ferguson were absent. FTC also pointed out Ferguson's dissenting statement, reportedly former President Trump appointed Ferguson to replace Lina Khan as the next chairman of the FTC in December of last year. Ferguson noted that such transfers "will not be disclosed unless the Department of Justice or the Commission initiates litigation." He wrote: "I did not attend that absurd closed-door meeting where this matter was approved." Ferguson added that he opposed the FTC's complaint against Snap, but he could not "disclose a detailed analysis of its many issues" since the case remains undisclosed. Ferguson wrote that the complaint's interpretation of FTC law was "wrong" and directly conflicted with the protection of the First Amendment. Ferguson stated that if the Department of Justice files a complaint, he will "make a more detailed statement on this insult to the Constitution and the rule of law."