• by Ray Schultz , March 31, 2023

OpenAI’s ChatGPT hit its first real regulatory hurdle when the Italian Data Protection Authority temporarily blocked it following a data breach. 

The Italian Data Protection Authority said it will block ChatGPT “until ChatGPT respects privacy.” 

Italy -- apparently the first democracy to institute such a block -- demands that OpenAI report within 20 days what measures it will take to protect privacy. Failing that, the company faces a fine of 20 million euros or 4% of annual global revenue.  

However, as of Friday, NetBlocks had not detected any blocking of OpenAI’s website, AP reports. 

The company itself took ChatGPT offline last week after a bug allowed some users to see titles from another user’s chat history.
 Also exposed were email addresses and other information. The company said the problem affecting 1.2% of its users was resolved. 

Italy charged that OpenAI does not notify users about the data it collects on them. It remains to be seen if wider actions might be taken in the EU under GDPR. 

Still, the ban by the Italian regulators “comes as a surprise,” says Ron Moscona, a partner with the international law firm Dorsey & Whitney. 

Moscona notes that it is “unusual to completely ban a service because of a data breach incident. Time will tell if other regulators follow the Italian example.” 

But Moscona notes that consumer interaction with the chatbot is “so much richer and more detailed than with any other digital technologies available to the general public." 

This raises fears that “the potential of this technology to cause harm and threaten personal privacy might actually be a lot greater than the privacy threats posed by standard search engines, content sharing services, social media services and other digital platforms.” 

The technology is capable of mimicking humans, making it “a perfect tool for fraudsters and for anyone who wants to deceive.” Then there is the potential job loss.  

Moscona concludes, “Those concerns and many others will be multiplied if and when AI chatbot services will become available from multiple providers and not just from leading companies like Microsoft (OpenAI) and Google.”