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Texas AG Investigates Meta and Character.AI for Deceptive AI Mental Health Services and Privacy Violations

Meta Platforms, Inc. and Character Technologies, Inc.August 18, 2025Texas Attorney General

Summary

Texas Attorney General Ken Paxton opened an investigation into Meta and Character.AI via Civil Investigative Demands, alleging deceptive trade practices including misrepresenting AI chatbots as confidential mental health tools while harvesting user data for targeted advertising. The probe assesses potential violations of Texas consumer protection laws and the SCOPE Act, particularly regarding privacy misrepresentations, concealment of data usage, and harms to children. This builds on prior investigations into Character.AI for SCOPE Act compliance.

Contract Impact

In-house legal teams should review all contracts with AI service providers, especially those offering chatbots or automated advice tools, to ensure explicit disclosures of data collection, usage, and sharing practices, particularly regarding confidentiality claims. Clauses governing children's data processing, consent for targeted advertising, and AI-driven automated decision-making must be updated to comply with the SCOPE Act and Texas consumer protection laws. Additionally, terms of service and vendor agreements should be audited to eliminate misleading privacy representations and ensure full transparency of data usage for all users, including children and vulnerable populations.

Contract Search Terms

AI chatbot privacy disclosureschildren's data consentSCOPE Act complianceconfidentiality misrepresentation termsdata usage concealmenttargeted advertising AI dataautomated decision-making disclosuresmental health AI terms of service

Laws Cited

Texas Consumer Protection LawsSCOPE Act (Texas S.B. 1896)

Violation Types

Entity Details

Entity

Meta Platforms, Inc. and Character Technologies, Inc.

Industry

Technology

Official Sources

Source Evidence

Entity Name
"Meta and Character.AI"
Entity Name
"Meta AI Studio and Character.AI"
Jurisdiction
"Texas Attorney General Ken Paxton"
Event Type
"opened an investigation"
Event Date
"August 18, 2025"
Laws Cited
"Texas consumer protection laws"

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