David Carter warns Intro 2599 threatens e-commerce businesses
David Carter of the eCommerce Innovation Alliance warns that Intro 2599's vague definition of 'chatbot' could require e-commerce businesses in text message conversations to remind users every hour that they're engaging with AI, risking $25,000 penalties and copycat litigation.
Good evening, Chair De La Risa, members of the Council.
My name is David Carter.
I'm the President and CEO of the eCommerce Innovation Alliance.
I represent about 20,000 eCommerce companies across the country, including many that are based in your districts right here in New York.
And today I just want to take a couple minutes of your time to speak to you about a few unintended consequences.
I've worked with legislature.
across the country when they've been implementing legislation, particularly around telemarketing, to try to make sure legislation gets to the heart of the issues you care about without unintended consequences for small and mid-sized businesses.
And in particular, I wanted to speak to you about 2599, the chatbot bill.
The chatbot bill uses vague language to define what is a chatbot.
Anything that stimulates or simulates conversation is a chatbot, and anyone that makes a chatbot available is subject to the regulations in 2599.
So I want to talk to you for a moment about e-commerce companies and how they work.
You go to their website, you volunteer to sign up for text messages that you get your discount codes.
Most people like the discount codes.
They don't want unintended consequences.
They don't want a lot of messages.
Under this bill, a company that uses AI to communicate with consumers that have asked to receive text messages would be required to remind the consumer every hour, on the hour, that they're engaging in a conversation with an AI.
That works if you're on a website that you open and close the chatbot conversation.
It doesn't work when you're engaged in text message conversations that can last for days or weeks at a time.
Under this legislation, though, if a company uses AI just to communicate with consumers and they don't send out that reminder every hour on the hour, they're subject not only to $25,000 penalties, but they're subject to...
to private litigation and other enforcement.
This is a recipe to put businesses out of business, unfortunately.
We have an industry of professional plaintiffs and plaintiff's attorneys that would be incentivized to crowd the courts with repetitive litigation about these issues.
So I just want to help the council refine the language to not have these unintended consequences.
Thank you.
If you could submit the language of your testimony.
We'd appreciate that.