Snap shares drop as FTC refers MyAI chatbot complaint to the DOJ
Snap shares closed down 5% on Thursday after the Federal Trade Commission said it would refer a complaint against the company to the Department of Justice.
The FTC's non-public complaint involves allegations that Snapchat's My AI chatbot poses "risks and harms to young users," the commission said in a statement. The complaint stems from the FTC's compliance reviews with Snap following a 2014 settlement regarding allegations of public deception pertaining to data collection by the company.
As part of the FTC's compliance reviews of Snap, the agency said it had uncovered the possibility that the company "is violating or is about to violate the law."
The FTC did not specify what about the My AI chatbot its complaint was focused on, but the chatbot has previously drawn scrutiny.
"Unfortunately, on the last day of this Administration, a divided FTC decided to vote out a proposed complaint that does not consider any of these efforts, is based on inaccuracies, and lacks concrete evidence," the Snap spokesperson said. "It also fails to identify any tangible harm and is subject to serious First Amendment concerns."
