Character.AI faces fresh scrutiny in Italy over its handling of children's personal data.
The country’s privacy regulator fined Character Technologies, the US-based company behind Character.AI, after finding problems with privacy notices, age checks, safeguards for minors, and EU compliance steps. The decision adds to Italy’s role as one of Europe’s most active AI privacy enforcers, especially for services used by children and teens.
Italy flags privacy and age-check failures
Reuters reported that Italy’s data protection authority fined Character Technologies €158,000, or about $180,500, for breaches of data protection rules.
Character.AI lets users create and chat with AI-generated virtual characters, including minors. Reuters noted that the Italian authority found several privacy violations, including shortcomings in the information provided to users about personal data processing.
The Italian Data Protection Authority, known as the Garante, said it found “critical issues” in protections for minors and in age-verification systems.
The authority added that Character Technologies was late in preparing a Data Protection Impact Assessment and in designating an EU representative. Those steps are central to EU privacy compliance because they show how a company assesses data risks. These steps can also help regulators determine who can be held accountable in Europe.
What Character.AI must change
Garante said Character Technologies must ensure its age-verification systems work correctly. It also ordered the company to implement more effective mechanisms that prevent minors who were previously blocked from registering new accounts.
The regulator specifically pointed to the so-called “cooling-off period,” a control designed to stop minors from quickly trying to register again after being blocked.
Garante also ordered Character Technologies to set minors’ profiles to private mode by default. The company must report the measures it adopts within 120 days of receiving the order.
Character Technologies has yet to respond to Reuters’ request for comment.
Chatbot age checks face tougher scrutiny
For AI developers operating in Italy and the wider European market, the fine shows that age checks are no longer just a user experience feature. Regulators increasingly treat them as part of a broader compliance system that includes transparency, privacy risk assessments, child safety controls, and local representation.
The bigger risk is not the size of the fine.
For Character.AI and similar platforms, the ruling could mean product changes, added friction during signup, and closer regulatory attention in Europe, especially for services built around long, personal conversations with chatbots.
Age assurance also creates its own privacy challenge. Stronger checks can help protect minors, but they may require companies to collect or process more user information. AI companies will need to show regulators they can reduce child safety risks without creating new data protection problems.
Italy has already shown its willingness to challenge major AI services. Reuters reported that Garante briefly banned OpenAI’s ChatGPT in 2023 over age-check and data-collection issues. The Character.AI fine adds another signal that consumer AI platforms, especially those used by minors, will continue to face pressure under Europe’s existing privacy rules.
More news: Learn about Meta’s plan to use AI to scan Instagram and Facebook photos for signs of underage users.