In a significant move for technology regulation, California Attorney General Rob Bonta has released two crucial legal advisories concerning the use and development of Artificial Intelligence (AI) within the state. These advisories, issued on January 13, 2025, highlight the obligations of businesses, healthcare providers, and AI developers to adhere to both existing and new legal standards as AI technology continues to rapidly evolve.
“California’s innovation economy is built not just on technological advancements but on a firm commitment to fairness, accountability, and the protection of rights,” said Attorney General Bonta. “While AI is changing the landscape, the state’s legal framework is clear — those who develop, sell, or use AI systems must comply with California’s established laws to safeguard public interests.”
AI in Daily Life and Associated Risks
AI is now embedded in various sectors of everyday life, influencing major decision-making processes, including:
- Financial Services: AI helps evaluate consumer credit and determines loan eligibility.
- Real Estate: AI is used for tenant screening and property evaluations.
- Employment: AI assists in recruitment and employee evaluations.
- Healthcare: AI tools guide diagnosis, treatment plans, and administrative tasks like scheduling and insurance claims.
- Education: AI is used in developing personalized learning systems.
However, the growing integration of AI has brought concerns, particularly regarding biased or faulty decision-making, and a lack of transparency. For instance, AI systems used in healthcare or finance might make decisions without clear understanding of their inner workings, which could have serious consequences for consumers.
Legal Advisories Focus Areas
1. Consumer Protection and AI Accountability
The first advisory provides a detailed overview of how existing California laws apply to AI, including consumer protection laws, civil rights protections, competition regulations, and data privacy rules. Businesses that use AI to make significant decisions about consumers—such as in finance, housing, or employment—are required to disclose their use of AI systems and ensure transparency and fairness in their operations.
2. Special Guidance for Healthcare Providers and AI
Healthcare AI, with its increasing use in medical diagnosis, patient treatment, and administrative tasks, is subject to unique legal challenges. The second advisory is specifically geared toward healthcare entities, reminding them of their responsibilities under California’s consumer protection laws, civil rights protections, and healthcare privacy regulations. The guidance stresses the need for healthcare providers to ensure AI systems are tested, validated, and audited to prevent biases and errors that could harm patients.
Additionally, healthcare providers must be transparent with patients regarding the use of AI, especially in the collection of personal health data used to train AI models. Developers of AI tools used in healthcare are urged to minimize risks of discrimination and to prioritize patient safety and privacy.
Key Legal Changes Under California Law
Effective January 1, 2025, new laws introduced specific guidelines for AI in California, including:
- Disclosure Requirements: Businesses must be transparent about when AI is used to make consumer-impacting decisions.
- Protection Against Unauthorized Use of Likeness: AI cannot exploit individuals’ likenesses without consent.
- AI in Election Campaigns: Strict rules have been put in place to prevent the use of AI in election-related materials to avoid misinformation.
- Prohibition of Exploitative AI Uses: AI applications that could harm consumers or violate their rights must be reported.
Conclusion
The advisories remind that AI’s rapid development must still operate within the bounds of law. Companies and healthcare entities are responsible for complying with California’s broad legal framework, which includes not only specific AI regulations but also existing laws in areas like privacy, anti-discrimination, and consumer protection. Attorney General Bonta concluded, “While AI presents great opportunities, it is critical that it be used responsibly and in compliance with the laws that protect Californians’ rights and well-being.
