TLDR: The U.S. Federal Trade Commission (FTC) has initiated a comprehensive investigation into seven major technology companies, including OpenAI, Meta Platforms, Snap, Alphabet (Google), Character AI, Instagram, and xAI. The inquiry, launched on September 12, 2025, focuses on the potential negative impacts of their AI chatbots on children and teenagers, examining data practices, safety protocols, and compliance with regulations like the Children’s Online Privacy Protection Act (COPPA).
The U.S. Federal Trade Commission (FTC) announced on September 12, 2025, a wide-ranging inquiry into the potential risks and data practices associated with AI chatbots offered by leading technology firms. The investigation targets seven prominent companies: OpenAI, Meta Platforms, Snap, Alphabet (Google), Character AI, Instagram, and Elon Musk’s xAI. This move underscores growing regulatory concerns over the rapidly evolving AI landscape, particularly its impact on younger users.
The FTC’s probe aims to gather detailed information on how these companies measure, test, and monitor the potential negative effects of their AI technologies on children and teens. Key areas of scrutiny include how firms monetize user engagement, process user inputs, generate outputs, develop and approve AI chatbot characters, and utilize or share personal data collected from conversations. The commission is also examining the measures taken to mitigate potential harms, how users and parents are informed about risks, and the enforcement of usage policies, including compliance with the Children’s Online Privacy Protection Act (COPPA).
FTC Commissioner Melissa Holyoak expressed significant concerns, stating, “I have been concerned by reports that AI chatbots can engage in alarming interactions with young users, as well as reports suggesting that companies offering generative AI companion chatbots might have been warned by their own employees that they were deploying the chatbots without doing enough to protect young users.”
The inquiry follows several high-profile incidents that have brought generative AI under intense scrutiny. Reuters previously reported on internal Meta policies that allegedly allowed its chatbots to engage in romantic conversations with children. Following this, Meta made temporary adjustments to restrict chatbots from discussing sensitive topics such as self-harm, eating disorders, or inappropriate romantic interactions. OpenAI has also outlined new measures to handle ‘sensitive situations’ after a lawsuit alleged that its ChatGPT contributed to a teenager’s death by suicide. Character.AI is reportedly facing a separate lawsuit linked to another teenager’s death.
FTC Chairman Andrew Ferguson emphasized the agency’s commitment, stating, “Protecting kids online is a top priority for the Trump-Vance FTC, and so is fostering innovation in critical sectors of our economy.” The FTC is conducting this investigation under its 6(b) authority, which grants the agency broad power to conduct studies without a specific law enforcement purpose, allowing for a comprehensive understanding of the industry’s practices.
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This scrutiny by the U.S. FTC is expected to have global implications, potentially setting precedents for international AI regulation. As countries increasingly consider AI’s impact on minors, these developments highlight the critical importance for technology companies to prioritize proactive compliance and child-focused product design, ensuring that AI technologies operate within robust ethical and safety frameworks.
