H.R. 7218 — CHAT Act

This section establishes definitions for terms used in the Act, including (1) "Commission" as the Federal Trade Commission; (2) "companion AI chatbot" as a software-based AI system primarily simulating emotional interaction, friendship, companionship, or therapeutic communication (excluding customer service bots, video game features limited to game topics, and stand-alone voice-activated virtual assistants); (3) "covered entity" as any person owning, operating, or making available a companion AI chatbot to U.S. individuals; (4) "minor" as any individual under 18 years of age; (5) "popup" as a visible user-resolvable screen notification; (6) "sexually explicit communication" as any content describing, depicting, or encouraging sexually explicit conduct, as defined in 18 U.S.C. §2256(2)(B) (i.e., graphic sexual intercourse or lascivious simulated versions thereof; graphic or lascivious simulated bestiality, masturbation, or sadistic/masochistic abuse; or graphic or simulated lascivious exhibition of the anus, genitals, or pubic area); and (7) "suicidal ideation" as a minor's expression of self-harm or suicide thoughts in interactions with a companion AI chatbot.

This section establishes obligations for covered entities operating companion AI chatbots. Specifically, it requires (1) user accounts for all access; (2) age verification for existing accounts (via freeze and restoration with commercially available methods on the date specified in section 7) and new accounts (at creation); (3) for minor users, affiliation with a verified parental account, verifiable parental consent prior to access, parental notification of suicidal ideation interactions, and blocking of sexually explicit chatbots; (4) confidentiality protections limiting collection, use, and storage of age data to verification, consent, and compliance needs; (5) monitoring of interactions for suicidal ideation with provision of National Suicide Prevention Lifeline contact information to the user and affiliated parental account; and (6) clear popup notifications at the start of interactions and every 60 minutes thereafter stating that the user is not engaging with a human.

This section directs the Commission to issue guidance to assist covered entities in complying with the Act's requirements, not later than 180 days after the date of enactment. It limits enforcement actions and consent orders under the Act to specific violations of its provisions, prohibits basing such actions on practices inconsistent with the Commission's guidance unless they violate a provision of the Act, and permits persons to use the guidance as evidence of compliance.

This section establishes enforcement authority for violations of the Act. It (1) treats such violations as violations of a rule defining unfair or deceptive acts or practices under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)); (2) authorizes the Federal Trade Commission to enforce the Act using all powers, jurisdiction, duties, penalties, privileges, and immunities provided under the Federal Trade Commission Act (15 U.S.C. 41 et seq.); and (3) authorizes state attorneys general to bring civil actions in federal or state court as parens patriae on behalf of state residents to enjoin violations, enforce compliance, obtain damages or restitution, or secure other relief, subject to prior written notice to the Commission (or concurrent notice if infeasible), Commission intervention and removal rights, and restrictions on duplicative state actions during Commission proceedings.

This section establishes a safe harbor from liability under the Act for covered entities that demonstrate they have (1) relied in good faith on age information provided by a user of the companion AI chatbot to verify the user's age, (2) complied with the guidance described in section 4, and (3) reasonably conformed to widely accepted industry standards or best practices—or to standards or best practices identified by the Commission—for age verification, applied consistently and in good faith.