In a bankruptcy court hearing on Friday, US Bankruptcy Judge Brendan Shannon recommended that Character Technologies appoint a privacy ombudsman to evaluate potential harm to children from its AI platform. The move comes as part of the company's plan to license some of its technology to Walt Disney Co. Although Shannon did not issue a formal order, he emphasized that hiring an expert would help address privacy concerns raised by several state attorneys general.
The judge's suggestion follows lawsuits and investigations into the company's platform, which has sparked worries about customer privacy. Shannon stated that he would 'strongly encourage' the appointment of an ombudsman to assess these risks before the deal with Disney proceeds.
The recommendation aims to alleviate concerns from state officials who have expressed skepticism about the potential impact of the AI technology on young users. While the judge stopped short of mandating the appointment, his strong encouragement signals the importance of addressing privacy issues in the deal.