A bill moving through the New Jersey Assembly would classify AI chatbots as products for liability purposes and hold their providers strictly liable when users are harmed, even where the provider took all reasonable care. Assembly Bill A5607 was introduced on 5 October and cleared the Assembly Public Safety and Preparedness Committee on 19 October, according to an analysis in The National Law Review.
What we know
The bill has been referred to the Appropriations Committee and has not passed either chamber. The National Law Review says it draws on a "People-First Chatbot" model bill developed by EPIC, the Consumer Federation of America and Fairplay.
Beyond liability, the text would bar providers from using chat logs to target advertising, selling chat logs, or keeping them for more than two years unless the law requires it. Training on data from users known or likely to be under 18 would be banned, and training on adult data would need prior opt-in consent that cannot be inferred from continued use. Providers would also have to run monthly risk assessments, publish a data security programme and let users download their chat histories.
Enforcement would include $5,000 civil penalties per violation and a private right of action. The National Law Review reports that consumer and privacy advocates backed the bill in committee, while the New Jersey Chamber of Commerce, TechNet and Meta opposed it.
Why it matters
Most state chatbot laws so far, such as California's SB 243 and New York's companion rules, are aimed at companion products. A5607 has no carve-out for customer service or general-purpose bots, so its definition of a "chatbot provider" could catch any business that deploys one. For companion operators, strict liability is the sharper threat: it removes the usual argument that a provider behaved reasonably, and the bill does not clearly require proof of a defect. Combined with the ad-targeting ban and the two-year retention cap, it would rule out several monetisation and data strategies the sector relies on.
What to watch
Whether Appropriations amends the liability language or adds exemptions, and whether the bill reaches a floor vote before the session ends.
Written by the AI Companion Wire newsroom from public reporting, credited above. Image via The National Law Review.
