New Jersey is moving to treat AI chatbots as products under the state’s product liability law, and make their makers strictly liable for injuries their products cause – even if the company was careful and had no direct contract with the user.
A bill to this effect, A5607, was introduced on October 5, and after passing the Assembly Public Safety and Preparedness Committee on October 19, has been sent to the Appropriations Committee.
This means that users who are harmed by violations of the bill’s provisions could sue chatbot makers for actual damages or $5,000 per violation, while the attorney general would be able to seek civil penalties of $5,000 per violation.
The New Jersey bill would also restrict the use of chat logs and personal data for advertising, profiling, and training AI. This would represent a real gain for users, who are currently often subjected to this type of data harvesting and exploitation by tech companies.
The bill would also require providers to keep users’ chat logs and allow them to download these logs. What this means is that while on the one hand, users would have more control over their data, on the other, the provider would be forced to keep a record of all conversations that take place on their platform.
That is a store of highly personal and intimate records that can be accessed by law enforcement, other litigants, and hackers.
This is not merely theoretical, as we reported in October about a Florida woman who used the Claude chatbot as a “diary” – and got arrested after the system flagged one of her entries as suspicious. The local sheriff’s office then warned people that they are “never truly anonymous” when using AI.
The New Jersey bill’s provisions that are supposed to protect users’ privacy and safety could ultimately backfire, as the strict liability standard that would be imposed on companies could lead to even more surveillance of users.
As lawyer Scott S. Christie told Law.com, the bill would “open the floodgates” and explained that, “When there’s $5,000 in statutory damages per violation and you don’t have to prove any harm, in addition to the strict liability standard, you’re talking hundreds of thousands and perhaps millions of dollars per lawsuit.”
He also explained that the way the bill is written means that if a chatbot provider violates the statute with one user, “it’s probably violating as to all users.”
To avoid this, the obvious course of action for companies would be to watch their users more closely, verify their identities, and report them to the authorities when the algorithm decides that is warranted.
