Texas Attorney General Ken Paxton launched investigations into Character.AI and 14 other companies, including Reddit, Instagram, and Discord, over potential violations of children’s privacy and safety laws. The investigations focus on compliance with the SCOPE Act and Texas Data Privacy and Security Act (TDPSA), which require parental consent for sharing minors’ data and mandate notice and consent requirements for children’s personal information. No fines or remedies have been imposed as the investigations are ongoing.
In-house legal teams should review all vendor agreements involving digital services, social media platforms, AI products, and any services collecting data from minors to ensure compliance with the SCOPE Act and TDPSA. Key clauses to update include those governing parental consent for collection, sharing, or sale of minors’ personal identifying information, requirements to provide parents with privacy control tools, and notice and consent provisions for processing minors’ data. Teams should also verify that vendors prohibit unauthorized sharing or disclosure of children’s data, and include audit rights to confirm adherence to Texas children’s privacy laws. Additionally, agreements with AI product vendors should specifically address compliance with minor data protection requirements under applicable state laws.
Entity
Character.AI, Reddit, Instagram, Discord, and 14 other companies
Industry
Social Media"Character.AI and fourteen other companies including Reddit, Instagram, and Discord"
"Securing Children Online through Parental Empowerment (“SCOPE”) Act"
"Texas Data Privacy and Security Act (“TDPSA”)"
"prohibits digital service providers from sharing, disclosing, or selling a minor’s personal identifying information without permission from the child’s parent or legal guardian"
"TDPSA imposes strict notice and consent requirements on companies that collect and use minors’ personal data"
"launched investigations into Character.AI and fourteen other companies"
$3.0M
Texas Attorney General Ken Paxton announced a settlement requiring Temu to protect Texans’ sensitive personal data from exposure to the Chinese Communist Party and to strengthen product-safety practices. Temu must pay Texas $3 million, comply with data-security requirements backed by a potential $8 million annual penalty, conduct annual independent product testing, and take specified action on products found to contain harmful substances.
$773.0M
Texas Attorney General Ken Paxton announced that a multistate coalition had secured an opioid settlement with Albertsons, which would require the grocery chain to pay more than $773 million nationally once final. Texas and its political subdivisions may receive up to $57.8 million for opioid abatement; the release does not identify privacy violations.
Texas Attorney General Ken Paxton sued Gerber Products Company and Nestlé USA, Inc., alleging that Gerber made deceptive safety and testing claims while its baby food contained dangerous levels of toxic heavy metals. The lawsuit asserts claims under the Texas Deceptive Trade Practices Act; the release does not report a settlement, monetary penalty, or court order.
$1.5M
The Texas Attorney General obtained a judgment holding Rubinsky Roofing LLC liable for 27 violations of the Texas Deceptive Trade Practices Act, including deceptive practices involving older consumers and payment for unnecessary or unfinished repairs. The judgment requires more than $1.5 million in civil penalties, allocates at least $500,000 to consumer restitution, and permanently bars the company and its owner from the practices at issue.
The Texas Attorney General opened an investigation into UnitedHealth Group over allegations that its insurance-benefit administration and patient-care decisions denied Texans medically necessary healthcare. The AG issued Civil Investigative Demands to collect evidence; the release announces no penalty or remedy.
$7.5M
Texas Attorney General Ken Paxton announced a $7.5 million settlement with Tris Pharmaceuticals over alleged misrepresentations about the efficacy of Dyanavel XR, an ADHD drug marketed for children. The release says the company overstated the drug’s efficacy and directed sales representatives to make misleading claims to doctors, including Medicaid providers.