As the Patagonia lawsuit and heightened claims both show, one of the biggest issues with GenAI will be the invisibility around who owns the data, collects it, processes it, and for what purpose.
Patagonia, the outdoor clothing retailer, found itself in the headlines, and for all the wrong reasons. A class action lawsuit against the company says it violated the privacy of thousands of consumers, with generative AI (GenAI) chatbots at the centre of the story. Read on to find out more.
Patagonia’s Lawsuit
How did Patagonia end up in this mess? The class action lawsuit comes from the company’s improper (apparently unknowingly) use of GenAI technology to record conversations with customers.
To be more specific, Patagonia used Talkdesk and LegalShield GenAI technology to listen, record, and analyse conversations with customers without their consent – rookie error from a massive company.
The complaint claims that Talkdesk’s AI assistant Copilot hears customer calls and assists representatives with real-time information and insights. These AI-driven tools are designed to improve customer support, but the complainants state that Patagonia hid how customers’ data was being collected, processed, and stored. This invasion of privacy, especially under the California Invasion of Privacy Act, is what the case is investigating.
According to the details, Patagonia was then collecting and holding the information, later training its GenAI algorithms using it.
The lawsuit claims that a company like Patagonia should have explained the extent of the use of AI tools – and they definitely should have done that.
The case happens to be a presage on the indictment of other organizations operating using GenAI on how those systems are known to use consumer data to avoid breaching data protection.
The Risk of GenAI in Chatbots
GenAI is an incredible technology – every business should explore using it. But there are risks. Privacy, data, security, and responsibility are all at the forefront of the case against Patagonia.
As the Patagonia lawsuit and heightened claims both show, one of the biggest issues with GenAI will be the invisibility around who owns the data, collects it, processes it, and for what purpose. Companies must provide consent about the nature of the information collected and how the information is likely to be used. But when GenAI is involved, it’s difficult to find. GenAI can verbal interactions and the meta-information about their voice, emotion, and somatic activity.
The risks associated with AI increase with the potential for the system to malfunction and bias. After data collection, which usually happens by taking data people leave behind within their digital footprint, and self-study of the existing database of information generated by consumers, GenAI systems can reprogram the performers attached to them, which can have disastrous results.
And now there’s a fresh worry that GenAI systems could infringe on certain laws prohibiting the unauthorized appropriation and usage of personal sensitive information.
How the Lawsuit Impacts GenAI Chatbots
It would set the stage for how GenAI operates in a consumer setting. The evolution of AI technology would correspond to heightened regulation, where companies would have to draw a line as to which data is collected and how AI uses it.
If the lawsuit is won, it would lead to stricter controls over the use of the GenAI in the provision of customer services. Organizations may have to tighten controls over data usage and get more consumer consent about what is done with their data. Well, this should be happening anyway, and Patagonia should have known that.
As in the case of Patagonia’s class action lawsuit, more are likely to follow, resulting in the complete disruption of how the industry thinks of GenAI. And we were at a point where every industry was buzzing about how they could use GenAI to enhance their understanding of their consumers and grow their business.
What do you think about the Patagonia lawsuit? Patagonia has yet to make a statement about the lawsuit, but we can imagine it’s not fun to be in Patagonia HQ right now. But it does seem crazy that such a big company didn’t reveal information about third-party data collection. Still, we’re sure that they’ll deny any involvement and will be strictly unaware of any wrongdoing.
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