Character.AI Fined €158,000 in Italy Over Data Protection and Child Safety Failures

Italy’s data protection authority hit Character Technologies with a €158,000 fine Thursday, accusing the company behind Character.AI of multiple data protection violations — including a failure to prevent children from using open-ended AI chat.

The Garante, Italy’s privacy watchdog, said the U.S. company did not block underage users from accessing Character.AI’s unrestricted chat feature until late last year. That means minors could interact with the platform’s AI-generated characters — which can take on any personality or scenario — without age-appropriate guardrails in place.

Character.AI lets users create and converse with virtual characters powered by generative AI. It’s popular among teenagers, many of whom use the platform to roleplay with fictional characters or create personalized chatbots. But that popularity also drew scrutiny from European regulators, who have been tightening enforcement around AI platforms and minors.

The Garante found Character Technologies violated several provisions of the General Data Protection Regulation. The company provided incomplete privacy information to users, delayed its mandatory Data Protection Impact Assessment, and failed to appoint a representative in the European Union in a timely manner.

On child safety specifically, the authority cited “critical problems” with both the company’s age verification systems and its measures to protect minors. The fine — €158,000, or roughly €122,800 at current exchange rates — is modest compared to GDPR’s theoretical maximum of 4% of global annual revenue, but it signals that regulators are watching how AI platforms handle young users.

Italy ordered Character Technologies to fix three things: ensure its age verification system actually works, implement mechanisms that prevent banned minors from re-registering, and set minors’ profiles to private by default.

The ruling follows a broader European push to hold AI companies accountable for how their products affect children. Ireland’s Data Protection Commission has opened inquiries into several AI platforms over similar concerns. France, the Netherlands, and Germany have all issued guidance or opened investigations into AI chatbots and their handling of minors’ data.

Character Technologies has not publicly commented on the fine. The company has 30 days to comply with the Garante’s order.