A New Twist On Keystroke Monitoring Lawsuits'What Companies Need To Know About Chatbots

• Published date: 26 August 2022
• Subject Matter: Corporate/Commercial Law, Consumer Protection, Litigation, Mediation & Arbitration, Privacy, Corporate and Company Law, Consumer Law, Privacy Protection, Class Actions
• Law Firm: Brownstein Hyatt Farber Schreck, LLP
• Author: Mr Matthew C. Arentsen, David R. Hale, Christine A. Samsel and Jonathan C. Sandler

In just the past few weeks, multiple class actions have been filed in California against a variety of companies, including Tiffany & Co., Dollar Shave Club, Goodyear Tires, M.A.C. Cosmetics and Michael Kors USA, making the surprising allegation that the companies engage in illegal wiretapping of online communications with consumers. The complaints'all filed by the same lawyer'allege that the defendants secretly deploy "keystroke monitoring" software that is used to intercept, monitor and record communications with visitors to their websites. The plaintiffs assert, on behalf of themselves and putative class members, that by doing so, the defendants have violated the California Invasion of Privacy Act (Cal. Penal Code Section 631).

The complaints primarily revolve around consumers' communications with sophisticated "chatbots" that "convincingly" impersonate an actual human. According the complaints' allegations, the chatbots not only encourage consumers to share their personal information but record and store the entire conversation without the consumer's knowledge or permission. Thus, any company that uses chatbots is a potential target of these class action lawsuits.

Section 631(a) of California's Penal Code imposes liability upon any entity that engages in conduct prohibited by that section'i.e., "by means of any machine, instrument, contrivance, or in any other manner":

(1) "intentionally taps, or makes any unauthorized connection, whether physically, electrically, acoustically, inductively, or otherwise, with any telegraph or telephone wire, line, cable, or instrument, including the wire, line, cable, or instrument of any internal telephonic communication system," or

(2) "willfully and without the consent of all parties to the communication, or in any unauthorized manner, reads, or attempts to read, or to learn the contents or meaning of any message, report, or communication while the same is in transit or passing over any wire, line, or cable, or is being sent from, or received at any place within this state" or

(3) "uses, or attempts to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained, or who aids, agrees with, employs, or conspires with any person or persons to unlawfully do, or permit, or cause to be done any of the acts or things mentioned above in this section."

As noted in the Ninth Circuit's recent decision in Javier v. Assurance IQ, LLC, "[t]hough written in terms of wiretapping, Section 631(a)...