An artificial intelligence (AI) company can be sued for product liability, privacy violations, or security failures under various legal theories. However, the viability of a lawsuit depends on the specific circumstances of the case, including the nature of the AI system, how it was used, and whether any damages resulted from its malfunction or deficiencies.
1. Product Liability for AI Malfunctions
Can AI be Considered a “Product”?
ZL Technologies, Inc. v. Does 1-7 (2017) 13 Cal. App. 5th 603, is a California appellate court decision that clarifies the legal standard a plaintiff must meet to unmask anonymous online defendants. The case underscores the balance courts must strike between protecting free speech rights under the First Amendment and allowing plaintiffs to pursue legitimate legal claims against unknown individuals.
Case Background
– ZL Technologies, Inc. (“ZL”), a software company, filed a lawsuit against anonymous defendants (“Does 1-7”) for defamation and trade libel.
It is a well-known fact that operating an online business necessitates adherence to a complex array of state, federal, and international regulations. Below is an overview of key regulatory areas to consider:
1. State Regulations
California:
Blockchain and cryptocurrency rules and regulations vary widely across jurisdictions with some countries embracing digital assets and others imposing strict restrictions. The following article includes an overview of the current legal landscape in the United States, European Union, China, and other key jurisdictions.
United States
1. SEC (Securities and Exchange Commission) Regulations
Creating a digital currency involves complying with a complex framework of state and federal regulations, including, but not limited to, the securities laws, anti-money laundering (“AML”) rules, and financial licensing requirements. Here’s an overview of the key legal considerations:
1. Federal Regulations for Creating a Digital Currency
For your information, several federal agencies oversee different aspects of digital currencies, depending on their structure and use.
A government agency such as the Drug Enforcement Administration (“DEA”) cannot wiretap a private citizen’s phone without probable cause or legal authority since it would violate constitutional and statutory protections. Wiretapping without lawful authority is illegal and can lead to significant consequences for law enforcement officials who overstep their bounds.
1. Fourth Amendment Protections
The Fourth Amendment of the U.S. Constitution protects individuals from unreasonable searches and seizures, including, but not limited to, electronic surveillance. This means:
On January 2, 2025, the United States Court of Appeals for the Sixth Circuit delivered a significant ruling and blocked the Biden administration’s efforts to reinstate net-neutrality regulations. The court determined that the Federal Communications Commission (FCC) lacked the legal authority to reclassify broadband services under Title II of the Communications Act, a move essential for enforcing net neutrality rules.
Net Neutrality’s Background
Net neutrality is the principle that Internet Service Providers (ISPs) must treat all data on the internet equally, without favoring or blocking particular products or websites. In 2015, during the Obama administration, the FCC classified broadband internet as a Title II telecommunications service, establishing regulations to enforce net neutrality. These rules were repealed in 2017 under the Trump administration, reclassifying broadband as a Title I information service, which subjected it to less stringent regulation.
This article was drafted to discuss the recent privacy violations committed by tech giants. The intersection of technology and privacy is an increasingly hot topic, and a specific incident involving Apple’s Siri highlights the challenges tech companies face in balancing functionality with user confidentiality. A post on Reddit’s privacy community brought attention to the issue of Siri inadvertently recording private conversations.
The Incident
Users reported cases where Apple’s Siri voice assistant activated without a clear prompt, subsequently recording fragments of personal conversations or background noise. While Siri is designed to activate upon hearing its wake words (“Hey Siri”), issues like accidental activation can arise, particularly in environments with ambient noise or words that phonetically resemble the wake phrase. These recordings, when captured, may be transmitted to Apple servers for analysis, which the company states is meant to improve Siri’s performance. However, this process also raises questions about consent and data handling.
In California, cable service providers are subject to stringent privacy regulations, especially under the California Consumer Privacy Act (“California CCPA”) and other state-specific laws.
The California Consumer Privacy Act is a landmark privacy law in California that grants residents extensive rights over their personal data and imposes significant obligations on businesses that collect, process, or sell such data. The CCPA, which was enacted in 2018 and effective from January 1, 2020, aims to enhance consumer data privacy and transparency.
1. Scope and Applicability:
Revenge porn—also known as non-consensual pornography—refers to the sharing of explicit images or videos of individuals without their consent, often with the intent to cause harm, shame, or distress. State and federal laws in the United States address the criminalization of revenge porn. While state laws vary widely, there is also a federal statute that addresses non-consensual pornography.
Federal Law: 18 U.S.C. § 2261A (The SHIELD Act)
– In 2019, Congress passed the Stopping Harmful Image Exploitation and Limiting Distribution (SHIELD) Act, which amends federal stalking law to include a provision that criminalizes certain instances of revenge porn.
