Snap Inc. is facing significant legal scrutiny as the U.S. Federal Trade Commission (FTC) has referred a complaint to the Justice Department concerning potential violations related to its My AI chatbot. The complaint alleges that the chatbot, integrated into Snapchat, may have caused harm to young users, although specific details of the alleged harm have not been disclosed. The FTC's decision to publicize the referral underscores the seriousness of the potential legal violations, suggesting that Snap might be on the verge of breaching consumer protection laws. This development has raised concerns among investors about the potential legal and financial repercussions for Snap.
The news of the FTC's referral to the Justice Department has led to increased volatility in Snap's stock, with shares experiencing a notable decline. The stock closed at $11.22 on January 16th, down 5.24% from the previous day's close of $11.84.