bbieron@platformeconomyinsights.com

California Enacts Law Regulating AI Chatbot Companion Services

Oct 1, 2025

Report from The Verge

In Brief – California has enacted legislation requiring companion chatbot developers to implement safeguards so that users are not misled into believing that they are interacting with a human. The measure requires a clear and conspicuous notification to users and requires that companion chatbot operators make annual reports to the Office of Suicide Prevention about safeguards they’ve put in place “to detect, remove, and respond to instances of suicidal ideation by users.” In his statement accompanying signing the bill, Governor Gavin Newsome (D) said, “We can continue to lead in AI and technology, but we must do it responsibly — protecting our children every step of the way. Our children’s safety is not for sale.” The chatbot bill was signed into law along with a collection of other digital and AI measures, including mandated warning labels for social media platforms, a device-based age verification mandate that will put Apple and Google at the center of enforcing age limits for mobile apps, new transparency duties for developers of large AI models, and changing civil liability law to reduce the ability of an AI developer or user to employ a defense in a liability case arguing that an AI system acted autonomously in harming someone.

Context – Alleged harms to young users from engaging with AI “companions” seems to be an AI version of the worst of social media. Those platforms are largely shielded from liability for objectionable content by Sec. 230, so critics have been resorting to legislation and lawsuits targeting platform characteristics like auto-play that they allege addict young users. The laws are facing skeptical federal judges, but the lawsuits are having more luck. Whether Sec. 230 applies to content created by generative AI is an open question, with Supreme Court Justice Gorsuch opining that it probably does not, as have Sec. 230’s congressional authors, but a strong argument can be made that everything created by a generative AI chatbot is just an algorithmic re-ordering of existing third-party content. Newsome vetoed a tougher AI chatbot companion bill that required companies to block teens under 18 if they could not guarantee that their chatbots would block objectionable content.

View By Monthly
Latest Blog
EU Commission Accepts X’s Plan to Address DSA Transparency Concerns

Report from MediaPost In Brief – The European Commission has announced the approval of X’s plan to address several Digital Services Act (DSA) compliance shortcomings identified by the regulator. The decision follows the €120 million fine imposed on the social media...

TikTok’s Latest EU DSA Charges Allege Failing to Protect Minors

Report from Reuters In Brief – TikTok faces fresh allegations from the European Commission that its platform design violates the EU's Digital Services Act (DSA) by failing to adequately protect minors. The preliminary findings mark the fourth DSA case opened against...

New Jersey Bans So-Called “Surveillance Pricing” for Groceries

Report from NJ.Com In Brief – New Jersey Gov. Mikie Sherrill (D) has signed the Fair Price Protection Act, banning grocery stores and third-party grocery delivery platforms from using consumers' personal data to set or vary food prices. Sherrill said the measure will...

France Officially Sets 15-Year-Old Age Threshold for Social Media

Report from the New York Times In Brief – France has become the first European country to fully approve a nationwide ban on social media for children under 15, with the law expected to take effect as early as Sept. 1. Passed by large majorities in both houses of the...

Platform Economy Insights produces a short email four times a week that reviews two top stories with concise analysis. It is the best way to keep on top of the news you should know. Sign up for this free email here.

* indicates required