The Department of Justice is requesting privacy safeguards for millions of Character.AI users whose conversations and personal information could be sold during the company’s bankruptcy proceedings. The DOJ’s bankruptcy office is calling for a consumer privacy ombudsman to help the court determine what data can be sold and establish protective terms. Character.AI’s privacy policy is unclear about data sales, and the company updated it in July while actively pursuing asset sales. The platform serves 12 million monthly users worldwide who spend an average of two hours daily on the service.
Character.AI’s chatbot tells users their conversations will remain private without explicit permission, yet the actual privacy policy permits the company to disclose personal information and transfer user data if the business is sold. Privacy experts emphasize that detailed conversations can identify users even when names are removed, making sensitive chats particularly vulnerable. The DOJ filing highlights concerns about protecting minors’ data and other sensitive information from sale to potential buyers who could later change privacy practices with user consent.
Source: Read the full story at The Record
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