Texas AG accuses Meta, Character.AI of misleading kids with mental health claims

The Texas Attorney General, Ken Paxton, has initiated an investigation into Meta AI Studio and Character.AI, citing concerns about their marketing practices related to mental health. According to a press release from the AG's office, both companies may have engaged in deceptive trade practices by presenting themselves as legitimate mental health tools. Paxton emphasized the importance of safeguarding Texas youth from potentially harmful technology, stating, "AI platforms that pose as sources of emotional support can mislead vulnerable users, especially children, into believing they are receiving genuine mental health care. In reality, these platforms often provide generic responses tailored to personal data rather than professional advice." This investigation follows recent scrutiny of Meta, prompted by Senator Josh Hawley, after a report revealed that its AI chatbots had inappropriate interactions with minors, including flirtatious behavior. The Texas AG's office accuses both Meta and Character.AI of creating AI personas that appear to function as therapeutic resources without the necessary medical credentials or oversight. Among the multitude of AI personas available on Character.AI, one particularly popular user-created bot called Psychologist has attracted significant attention from younger audiences. Meanwhile, while Meta doesn't specifically provide therapy bots for children, its AI chatbot remains accessible to minors, raising concerns about the appropriateness of such interactions. A spokesperson for Meta, Ryan Daniels, reassured that the company clearly indicates that its AI responses are generated by machines, not humans. He mentioned that their models are structured to encourage users to seek help from qualified medical professionals when necessary. However, it has been noted that children might not fully comprehend or may disregard such disclaimers. In his statement, Paxton pointed out that despite claims of confidentiality from AI chatbots, the terms of service reveal that user interactions are logged and tracked, which raises significant privacy concerns. According to Meta's privacy policy, the company collects various user interactions to enhance its AI and related technologies, although it does not explicitly mention advertising. Moreover, Character.AI's privacy policy indicates that it collects extensive user data, including demographics and browsing behavior, to refine its services and target advertising. TechCrunch has inquired whether tracking practices extend to children and is awaiting responses from both companies. Despite asserting that their services are not intended for children under 13, both companies have faced criticism for inadequately monitoring accounts created by minors. Character.AI's offerings are designed with younger users in mind, as noted by its CEO, Karandeep Anand, who revealed that his own daughter uses their chatbots. The data collection and targeted advertising practices employed by these platforms directly conflict with legislative efforts like the Kids Online Safety Act (KOSA), aimed at protecting minors online. KOSA had garnered strong bipartisan support before stalling due to lobbying from the tech industry, with Meta playing a significant role in opposing it. The act was reintroduced to the Senate in May 2025, as lawmakers continue to seek ways to protect children in the digital landscape. Paxton has issued civil investigative demands to Meta and Character.AI to determine if they have breached Texas consumer protection laws.