Italian Watchdog Fines ‘Replika’ AI Chatbot Developer Over Data Processing Protocol Concerns

• The company behind the Replika AI chatbot was fined in Italy for breaching rules protecting user privacy.
• Italian data watchdog Garante sanctioned Luka Inc. for failing to adhere to user data processing regulations.
• A previous investigation revealed that the company lacks age verification systems as well, posing a risk to underage users.

Italy's data protection authority has imposed a hefty fine of 5 million euros ($5.64 million) on Luka Inc., the developer behind the Replika AI chatbot. Despite its potential benefits, the Italian data watchdog, known as Garante, raised serious concerns over its data processing protocols.

Replika, a San Francisco-based AI startup, was launched in 2017 and offers its users customizable avatars designed to act as “virtual friends” aimed at enhancing emotional well-being. 

The latter is especially alarming as the platform could be accessed by children without any robust checks in place, posing significant privacy and safety risks, a recent Reuters report said.

Garante's decision to levy this fine underscores the critical importance of adhering to comprehensive regulations like the General Data Protection Regulation (GDPR).

The Italian watchdog ordered the suspension of Replika in the country in February 2023, citing specific risks to children, and fined its developer for lack of a legal basis for processing user data and age-verification systems.

This isn't an isolated incident; it follows a series of similar actions by European regulators, such as the fine imposed on OpenAI, the creator of ChatGPT, for privacy rule violations.

The Italian authority has also announced it will investigate whether Replika's generative AI system is compliant with EU privacy rules, especially around the training of its language model.