S. 2714 — CHAT Act

This section defines terms for purposes of the Act, including (1) Commission, as the Federal Trade Commission; (2) companion AI chatbot, as any software-based artificial intelligence system or program primarily for simulating interpersonal or emotional interaction, friendship, companionship, or therapeutic communication with a user; (3) covered entity, as any person owning, operating, or making available a companion AI chatbot to individuals in the United States; (4) minor, as any individual under 18 years of age; (5) popup, as a visible screen notification resolvable by user interaction; (6) sexually explicit communication, as any content, conversation, or material 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 intercourse, bestiality, masturbation, sadistic or masochistic abuse, or lascivious exhibition of the anus, genitals, or pubic area); and (7) suicidal ideation, as any dialogue in which a minor expresses thoughts of self-harm or suicide.

This section requires covered entities operating companion AI chatbots to (1) mandate user account creation for access; (2) verify ages of existing accounts (as of the date specified in section 7) by freezing them until verifiable age information is provided using a commercially available method reasonably designed to ensure accuracy, and verify ages of new accounts at creation using such a method; (3) for verified minors, affiliate accounts with verified parental accounts, obtain verifiable parental consent prior to access, notify parental accounts of any suicidal ideation interactions, and block access to chatbots engaging in sexually explicit communication; (4) limit collection, processing, use, and storage of age verification data to what is strictly necessary for verification, parental consent, or compliance records; (5) monitor all interactions for suicidal ideation and, upon detection, provide users and affiliated parental accounts with National Suicide Prevention Lifeline contact information; and (6) display a clear popup notification at the start of each interaction and no less frequently than 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 not later than 180 days after enactment. It limits Commission enforcement actions and consent orders under the Act to specific violations of its provisions, prohibits basing such actions on practices inconsistent with the guidance unless they violate a provision of the Act, and permits persons to use the guidance as evidence of compliance.

This section establishes Federal Trade Commission (FTC) enforcement of violations of the Act or its regulations by treating them as violations of an FTC rule defining unfair or deceptive acts or practices under section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(a)(1)(B)) and authorizes the FTC to apply all applicable terms, powers, penalties, privileges, and immunities of the FTC Act (15 U.S.C. 41 et seq.). (Thus, the FTC may seek civil penalties, injunctions, and consumer redress for such violations.) This section further authorizes state attorneys general to bring civil actions in federal or state court on behalf of state residents to enjoin violations, enforce compliance, obtain damages or restitution, or secure other relief, provided prior written notice (or concurrent notice if infeasible) and a copy of the complaint are given to the FTC. The FTC may intervene, remove the action to federal court, participate fully, and appeal; states retain preexisting investigative powers; no state action may proceed against a defendant if the FTC has already sued for the same violation; and venue lies where applicable under 28 U.S.C. 1391 or in state court of competent jurisdiction, with nationwide service of process.

This section establishes a safe harbor from liability under this 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 for age verification purposes, (2) complied with guidance under section 4, and (3) reasonably conformed to widely accepted industry standards or best practices—or standards or best practices identified by the Commission—for age verification, applied consistently and in good faith.