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Who is liable for what an AI-powered customer service chatbot says?

With AI’s growing role in customer service, businesses must tread carefully to balance innovation with accountability.

Last week, we had an interesting incident from Canada where a tribunal ordered Air Canada to honour a refund because it was sought based on advice peddled by its AI-powered customer service chatbot. The chatbot advised the traveller that they could apply for a refund retroactively to claim bereavement fares, when, in fact, the airline policy does not allow retrocative claims. Air Canada refused the refund noting that it cannot be held liable for the information provided by the chatbot, but the tribunal disagreed. "Air Canada suggests the chatbot is a separate legal entity that is responsible for its own actions. This is a remarkable submission. While a chatbot has an interactive component, it is still just a part of Air Canada’s website. It should be obvious to Air Canada that it is responsible for all the information on its website. It makes no difference whether the information comes from a static page or a chatbot," the tribunal member remarked. Since this incident, it appears that Air Canada has disabled its chatbot as we were unable to see the same on its website. In another interesting case in India, a user on X claimed that they could use Zomato's customer support chatbot as ChatGPT because the chatbot uses OpenAI technology. But in this case, the chatbot promptly escalated a refund request to a human agent. In India and elsewhere, many of the popular online platforms have a chatbot service powered by AI. Last year, one e-commerce platform proudly claimed that…

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