California’s New Chatbot Disclosure Law: What You Need to Know

July 28, 2019

If you run an online shopping platform, take two minutes to read about California’s new chatbot disclosure law: the B.O.T. (Bolstering Online Transparency) Act. Doing so could help you dodge a colossal fine.

California’s new chatbot disclosure law explained

California recently unveiled a new marketing regulation that will affect e-commerce websites. 

E-commerce is a trillion-dollar industry, and online shopping websites have evolved from digital magazines into immersive, interactive platforms that use sophisticated chatbots to help shoppers.

But there’s a rub: some people may not realize that they’re talking to a robot, not a human — and it’s got California legislators concerned. So they whipped up a statute.

California’s new bot law reads:

“[It is] unlawful for any person to use a bot to communicate or interact with another person in California online, with the intent to mislead the 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.”

Under California’s new bot law, disclosures must be clear, conspicuous, and appropriately designed. They must be displayed near the bot and not buried under a link in the fine print. Lastly, bot disclosures must be in the affirmative. For example:

  • Bad disclosure: I am not a person
  • Good disclosure: I am a bot

Exceptions exist. Web hosting and Internet service providers that field over 10 million monthly inquiries aren’t beholden to the bill. 

California’s bot disclosure law: Violation consequences

 What’s the punishment for violating California’s bot disclosure law? Interestingly, the bill didn’t spell out consequences. Most likely, misleading advertising parameters will apply, which can trigger a 6-month incarceration stint and fines up to $2,500 per violation.

If your chat bot talks to 100 consumers without proper disclosure, you’re looking at a fine of $25,000. 

Who must adhere to California’s bot disclosure law? 

If your website or app is accessible to people in California, you must comply with the new California bot disclosure law.

Reminder: All e-commerce websites must adhere to FTC guidelines

California’s new bot disclosure law isn’t the only online marketing rule. The Federal Trade Commission has outlined myriad regulations to which all websites operating within the United States must adhere. 

Connect with a California e-commerce Attorney

The Gordon Law Group’s California team works with e-commerce businesses on everything from contract drafting to online marketing compliance. Get in touch today to learn how we can enhance your business and help keep money in your pocket through proper compliance and better business positioning.

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