NY A10494: Imposes liability for misleading, incorrect, contradictory or harmful information to a user by a chatbot that results in financial loss or other demo… Verified

The A10494 bill introduces a new section to the New York General Business Law, establishing liability for chatbot proprietors when their systems provide misleading, incorrect, or harmful information to users. Specifically, if such information results in financial loss or other demonstrable harm, the proprietor cannot disclaim liability unless they correct the information within thirty days of being notified. The bill also requires proprietors to ensure that their chatbots provide accurate information consistent with their formal policies and terms of service. Proprietors are defined as entities with more than twenty employees that own or operate chatbots, excluding third-party developers. The bill mandates that users must be clearly informed when they are interacting with a chatbot rather than a human representative, with specific requirements for the notice's visibility and language. Failure to comply with these provisions could expose businesses to liability claims from users who suffer harm due to inaccurate chatbot responses. This bill aligns with growing trends in AI regulation, emphasizing accountability and transparency in automated systems. As such, businesses should prepare for potential changes in their operational practices to mitigate risks associated with chatbot interactions.