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San Diego Corporations: Commercial and Election Chatbot Statute

In September 2018, the California State Assembly passed a chatbot disclosure law (SB-1001). Then-Governor Brown signed the law, and it goes into effect on July 1, 2019. Essentially, the law requires that a website disclose to the user whether the user is texting/typing with a human being or an automated program (commonly called a “chatbot” — short for “chat robot”). Section 17940 defines a “bot” as “… an automated online account where all or substantially all of the actions or posts of that account are not the result of a person.”

Initially, the law was aimed at regulating the use of chatbots for political purposes on various social media platforms. The Russian government, for example, has been accused of using bot farms in an effort to influence voters here in the United States. However, the statute was broadened to prohibit the use of bots for commercial purposes, too. The statute prohibits:

  • Online communications or interactions
  • With a person in California
  • Via an online chatbot
  • With the “… intent to mislead the other person about its artificial identity …”
  • For the “… purpose of knowingly deceiving the person about the content of the communication in order to incentivize a purchase or sale of goods or services in a commercial transaction or to influence a vote in an election”

The statute provides a “safe harbor” where there is no liability if the person or business using the chatbot discloses that a chatbot is being used. The disclosure is required to be “… clear, conspicuous, and reasonably designed to inform persons with whom the bot communicates or interacts that it is a bot.” See Cal. Prof. Bus. & Prof. Code, §17940(b).

Note that, on its face, the statute applies to every online transaction and every San Diego business. Since the statute goes into effect on July 1, 2019, it is important for your business to determine if your website is using automated chatbots and that your business prepare written company policies and procedures with respect to disclosure. An experienced San Diego corporate attorney can help draft your company policies. The statute provides a definition of “online platform” that seems to limit the scope of the statute to large platforms having more than 10 million monthly US visitors. However, the operative language is not limited to “online platforms.”

The statute does not allow for citizens to sue for a violation of the law, but San Diego businesses will face expensive litigation anyway. Because the statute references “intent to mislead” and “knowingly deceiving,” California courts will very likely incorporate a violation of this law into legal concepts related to deceptive business practices. In other words, almost certainly, using a chatbot without disclosure will be considered a deceptive business practice and punished accordingly.

Call San Diego Corporate Law Today

For more information, call corporate attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard’s law practice is focused on business, transactional, and corporate matters and he proudly provides legal services to business owners in San Diego and the surrounding communities. Call Mr. Leonard at (858) 483-9200 or contact him via email. Like us on Facebook.

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