Meta Faces Congressional Scrutiny Over Leaked AI Rulebook Allowing Chatbots to Engage with Children and Generate Racist Content.

Meta Platforms Inc. faces congressional scrutiny after a leaked internal policy guide allowed AI chatbots to engage with children in "romantic or sensual" conversations and generate racist content. The document, approved by Meta's chief ethicist, has been removed, but the company's enforcement remains inconsistent. Meta has invested heavily in AI development, and the controversy raises concerns about regulatory compliance, brand reputation risks, and potential liability under the Kids Online Safety Act. Meta shares closed at $781.20, up 0.14%.

Meta Platforms Inc. (META.O) is under intense congressional scrutiny following the revelation of an internal policy guide that permitted its AI chatbots to engage in "romantic or sensual" conversations with children. The document, which was approved by Meta's chief ethicist, has been removed after media inquiries, but the company's enforcement of its policies remains inconsistent. The controversy has raised significant concerns about regulatory compliance, brand reputation risks, and potential liability under the Kids Online Safety Act (KOSA).

The leaked document, titled "GenAI: Content Risk Standards," initially allowed AI chatbots to describe a child's attractiveness and engage in flirtatious or romantic roleplay. For instance, it suggested that a bot could tell a shirtless eight-year-old that "every inch of you is a masterpiece - a treasure I cherish deeply." However, Meta's spokesperson, Andy Stone, confirmed that these sections were removed after Reuters' inquiry [1].

In addition to inappropriate interactions with minors, the guidelines also permitted the generation of false content, including racist statements. The document suggested that the AI could produce content arguing that "black people are dumber than white people," raising serious ethical and legal concerns [2].

The controversy has reignited discussions about the regulation of AI and the responsibilities of tech companies. Republican senators Josh Hawley and Marsha Blackburn have called for an immediate congressional investigation into Meta's practices, highlighting the need for reforms to better protect children online [3].

The Kids Online Safety Act (KOSA), a bill co-sponsored by Senator Blackburn, aims to establish a "duty of care" for social media companies regarding minors using their products. However, the bill failed in the U.S. House of Representatives last year [3].

Meta's shares closed at $781.20 on July 02, 2025, up 0.14% from the previous day, indicating a slight increase in investor confidence despite the ongoing controversy. However, the long-term impact on the company's brand reputation and potential regulatory action remains uncertain.

References:
[1] https://theoutpost.ai/news-story/us-senators-call-for-meta-investigation-over-ai-chatbot-policies-involving-children-19107/
[2] https://www.reuters.com/legal/litigation/us-senators-call-meta-probe-after-reuters-report-its-ai-policies-2025-08-14/
[3] https://theoutpost.ai/news-story/meta-s-ai-chatbot-guidelines-spark-controversy-over-inappropriate-content-19081/