NY S09381: 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 bill introduces a new section to the general business law, specifically addressing the liability of chatbot proprietors for the information provided by their systems. It prohibits proprietors from disclaiming liability for misleading, incorrect, or harmful information that results in financial loss or demonstrable harm to users. However, liability can be avoided if the proprietor corrects the misleading information within thirty days of receiving notice of the harm. The bill also mandates that proprietors ensure their chatbots provide accurate information aligned 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. Additionally, the bill requires that users be clearly informed when they are interacting with a chatbot, ensuring transparency in user interactions. The notice must be easily readable and in the same language as other text on the website. This legislation is significant as it establishes a framework for accountability in the use of AI chatbots, which are increasingly prevalent in various sectors. It aligns with growing concerns about the accuracy and reliability of AI systems in consumer interactions. Similar laws may exist in other jurisdictions, but this bill specifically focuses on the liability aspect, which could set a precedent for future regulations in the AI space.