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Italy Penalizes Character.AI Owner Over Child Safety and Privacy Controls

By  |  July 9, 2026
Italy Penalizes Character.AI Owner Over Child Safety and Privacy Controls

Italy’s data protection authority has imposed a financial penalty on the company behind Character.AI after concluding that the chatbot platform failed to implement sufficient safeguards to prevent minors from accessing its services, marking another example of increasing European scrutiny of artificial intelligence companies.

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    According to Reuters, Italy’s privacy regulator announced Thursday that it had fined Character Technologies, the U.S.-based developer of Character.AI, 158,000 euros (about $180,500) for violating data protection rules related to age verification and the protection of younger users.

    Character.AI allows users to engage in conversations with AI-generated virtual personalities covering a wide range of topics and fictional personas. Italian authorities determined that the company’s safeguards did not adequately prevent minors from interacting with the service, despite the platform’s potential to expose younger users to unsuitable content.

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    The action reflects a broader regulatory focus across Europe on how AI developers collect personal information, protect vulnerable users, and comply with the European Union’s privacy framework. Regulators have increasingly examined whether rapidly growing generative AI platforms have introduced sufficient safeguards as consumer adoption has accelerated.

    While the latest enforcement centers on privacy law rather than competition law, it adds to mounting regulatory oversight facing major AI developers. European authorities have increasingly relied on existing legal frameworks—including the General Data Protection Regulation (GDPR), consumer protection rules, and, in some cases, digital competition legislation—to scrutinize companies operating advanced AI services.

    Read more: Pressure Grows on OpenAI as Restructuring Deadline Nears

    Italy’s data protection authority, known as Garante, has been among Europe’s most active regulators in policing AI-related privacy issues. The agency previously investigated and temporarily restricted access to OpenAI’s ChatGPT in Italy before later fining the company over alleged GDPR violations. Reuters also reported that the regulator fined AI companion platform Replika’s developer in 2025 after concluding it lacked an adequate legal basis for processing user data and failed to establish effective age-verification measures.

    The Character.AI decision continues that pattern of enforcement focused on children’s online safety and responsible handling of personal data. European regulators have increasingly emphasized that AI services accessible to minors must incorporate effective mechanisms to verify users’ ages and reduce the risk of exposing children to inappropriate interactions.

    Although the Italian proceeding is distinct from antitrust enforcement, it forms part of a wider regulatory environment in which AI companies are facing simultaneous examination from multiple authorities. Across the European Union, regulators are evaluating AI providers through privacy, consumer protection, digital markets, and emerging AI governance rules, creating overlapping compliance obligations for technology firms operating at scale.

    Source: Reuters