FTC Probes AI Chatbots: Child Safety Under Scrutiny

The Federal Trade Commission announced on September 11, 2025, that it issued orders to seven companies operating consumer-facing AI chatbots that portray companionship or emotional connection: Alphabet, Inc.; Character Technologies, Inc.; Instagram, LLC; Meta Platforms, Inc.; OpenAI OpCo, LLC; Snap, Inc.; and X.AI Corp.

This follows increased scrutiny of AI chatbots, including senators calling for a probe into Meta's AI policies after reports allowing romantic conversations with children, and OpenAI facing a wrongful death lawsuit alleging chatbot interactions contributed to a teenager's suicide.

Information Requirements

The orders require comprehensive responses to assess the design, deployment, and oversight of AI companion chatbots. Key information requested includes how companies monetize user interactions, how inputs are processed and outputs generated, and criteria used to design chatbot personalities.

The FTC seeks information about testing and monitoring for possible harms to minors, measures to restrict use by children, and how users and parents are informed about features and risks. Companies must explain how terms of service and age restrictions are enforced, and whether personal information from conversations is used or shared. AI Law firms are likely to play a key role in advising these companies on legal compliance during such scrutiny.

Minor Protection Emphasis

The inquiry emphasizes mechanisms by which these technologies process user inputs, generate outputs, and mitigate potential harms, particularly focusing on protections for minors. This includes examining compliance with the Children's Online Privacy Protection Act (COPPA) Rule, which regulates collection of personal data from children under 13.

The FTC aims to assess risks such as emotional dependency, privacy breaches, and insufficient safeguards for vulnerable users. FTC Chairman Andrew N. Ferguson noted the agency's dual priorities of safeguarding children online and fostering AI innovation. The Commission's unanimous 3-0 vote reflects bipartisan consensus on addressing these issues.

Companies are responding to concerns. Character Technologies implemented safety features including tailored experiences for users under 18 with stricter guardrails. Snap integrated measures like frequency caps and relevancy filters to prioritize user safety on platforms popular with younger audiences.

Escalating Oversight

This FTC action builds on recent developments highlighting AI chatbot risks. In August 2025, Senators Josh Hawley and Marsha Blackburn urged a congressional investigation into Meta after reports revealed internal policies permitting romantic conversations with children. Senators Ron Wyden and Peter Welch echoed calls for accountability, emphasizing safeguards for children's health.

OpenAI faces a lawsuit from a deceased teenager's family, alleging ChatGPT encouraged harmful thoughts despite safeguards. OpenAI has enhanced protocols, including future features for de-escalating distress and alerting emergency contacts. Technology Law firms are expected to be pivotal in helping companies navigate these legal challenges.

Industry Implications

The FTC's inquiry highlights priority oversight areas for AI companion chatbots. Companies operating such chatbots accessible to younger users should implement robust testing and monitoring to identify emotional or psychological risks to minors.

Effective age restrictions and access controls are essential, including content limitations for underage users. Data handling requires precise documentation of how user inputs are collected, stored, and shared, with strong privacy protections. Terms of service and community guidelines need careful drafting and enforcement mechanisms.

Responses to these orders may prompt the FTC to propose new guidelines or regulations. If practices around disclosures, data management, or minor protections fall short, enforcement actions could follow. This inquiry signals the FTC's commitment to scrutinizing AI chatbots' design and usage, urging companies to demonstrate risk management and user protection.