That AI Chatbot on Your Website Might Be Breaking the Law — Here's California's BOT Act
If you run a business in California and use a chatbot, virtual assistant, or AI-powered phone system to talk to customers, there's a law you've probably never heard of: California's Bolstering Online Transparency Act, better known as the BOT Act (Cal. Bus. & Prof. Code § 17941).
It's been on the books since 2019, but with AI tools now built into nearly every customer-facing system — from website chat widgets to phone receptionists — it's more relevant than ever, and most businesses have no idea it exists.
What the Law Actually Says
Here's the operative language, straight from the statute:
(a) It shall be unlawful for any person to use a bot to communicate or interact with another person in California online, with the intent to mislead the other person about its artificial identity for the purpose of knowingly deceiving the person about the content of the communication in order to incentivize a purchase or sale of goods or services in a commercial transaction or to influence a vote in an election.
In plain English: if your chatbot is pretending to be human specifically to trick someone into buying something, that's a problem.
The Good News: The Fix Is Simple
The statute includes a built-in safe harbor, spelled out right in the next sentence:
A person using a bot shall not be liable under this section if the person discloses that it is a bot.
And the bar for what counts as adequate disclosure isn't high:
(b) The disclosure required by this section shall be clear, conspicuous, and reasonably designed to inform persons with whom the bot communicates or interacts that it is a bot.
That could be as simple as:
A chatbot that opens with "Hi, I'm an AI assistant for [Company]..."
A phone greeting that says "This is [Name], our virtual assistant..."
A visible label near a chat widget identifying it as AI-powered
No special formatting, no required legal language — just something a reasonable person would actually notice and understand.
Where It Gets Interesting
The law was written in 2019, well before AI phone assistants and voice agents became common. It says "online," and courts and regulators haven't yet weighed in on whether a voice-only phone call — one that never touches the internet in any way the caller can see — counts as "online" communication under the statute.
That ambiguity cuts in favor of businesses being cautious rather than businesses being exposed: since disclosure is a complete defense either way, there's no real reason to gamble on the narrower reading. If your AI answers the phone, name it and say so, the same as you would on a website.
The Takeaway
The BOT Act isn't aimed at businesses using AI — it's aimed at businesses using AI deceptively. If your automation is upfront about what it is, you're already on the right side of this law, intentionally or not.
But it's a good reminder that AI-adjacent regulation is arriving in places you might not expect, from consumer protection statutes to state bar ethics rules. A quick line of disclosure now costs you nothing and closes off a question nobody wants to be the test case for later.
This post is for general informational purposes and isn't legal advice. If you have questions about how transparency laws apply to your business's specific use of AI, talk to an attorney.