Internet Lawyer Blog
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”?
Traditional Product Liability: Under U.S. law (e.g., Restatement (Second) of Torts § 402A), product liability applies to tangible products that are defective in design, manufacturing, or warnings.
AI as a Product: The courts are still determining whether AI software qualifies as a product or a service: If an AI system is integrated into a physical product (e.g., an autonomous vehicle or medical device), traditional product liability laws may apply. If AI is pure software, some courts may categorize it as a service, limiting strict liability claims.
Legal Theories for AI Product Liability
If AI is considered a product, then a plaintiff could sue under three main product liability theories:
1. Design Defect: The AI system was inherently flawed in its design, leading to unsafe or unintended results (e.g., an autonomous vehicle misinterpreting traffic signals and causing an accident).
2. Manufacturing Defect: A specific AI implementation deviated from the intended design, leading to errors or malfunctions (e.g., a chatbot providing dangerous medical advice due to a software bug).
3. Failure to Warn/Inadequate Instructions: The AI company failed to provide adequate safety instructions or warnings about limitations (e.g., an AI medical diagnostic tool failing to warn users about high false-positive rates).
Challenges in Proving AI Product Liability
AI is often dynamic and self-learning, making it difficult to pinpoint a specific “defect.”
Causation issues: A plaintiff must prove that the AI itself (not user error or external factors) caused harm.
Regulatory uncertainty: AI-specific laws are still developing, which can complicate liability claims.
2. Privacy and Security Violations
Can AI Companies Be Sued for Data Breaches or Privacy Issues? Yes, an AI company can be sued if its system violates privacy rights or fails to secure user data. So, in summary, legal claims could be based on the following:
1. Breach of Contract/Terms of Service Violations: If an AI company fails to protect user data as promised in its privacy policy or terms of service, then users may sue for breach of contract.
2. Negligence: If an AI company fails to implement reasonable security measures that leads to data breaches, then the victims may sue under negligence laws.
3. Violations of Privacy Laws:
California Consumer Privacy Act (CCPA)/California Privacy Rights Act (CPRA): Protects California residents’ personal data.
General Data Protection Regulation (GDPR): If the AI company operates internationally, it may be liable for mishandling EU users’ data.
Biometric Information Privacy Act (BIPA): This law was implemented in the State of Illinois and covers AI that processes biometric data (e.g., facial recognition).
4. Federal Trade Commission (FTC) Actions:
The FTC can sue AI companies for unfair or deceptive practices related to data privacy and security.
Example: If an AI tool misrepresents how it handles user data, then the FTC can impose fines or mandate corrective actions.
3. Notable Cases & Legal Precedents
While AI-specific product liability cases are still emerging, related lawsuits highlight potential liability risks:
Boone, et al. v. Snap, Inc. (2022): Lawsuit over AI facial recognition violating BIPA.
Tesla Autopilot Cases: Multiple lawsuits claim Tesla’s AI-driven Autopilot feature caused accidents due to design defects.
Clearview AI Litigation (2021-2023): AI facial recognition company sued for violating privacy laws by scraping billions of photos without consent.
4. Conclusion: Can You Sue an AI Company? Yes, if the AI system causes harm due to defects, privacy violations, or security failures, legal claims may be available under product liability, negligence, breach of contract, or privacy laws. However, legal challenges exist, including proving AI defects, determining whether AI is a product or service, and navigating evolving regulations. Please visit www.atrizadeh.com for more information.