January 16, 2025

On Monday, January 13, the California Office of the Attorney General issued two legal advisories regarding the application of California law to artificial intelligence. According to the press release announcing the publication of the legal advisories, these documents “remind consumers of their rights, and advise businesses and healthcare entities who develop, sell, or use artificial intelligence about their obligations under California law.”

The legal advisories offer the following threefold layers of information:

• Provides an overview of many existing California laws that may apply to entities who develop, sell, or use artificial intelligence.
• Summarizes several new California artificial intelligence laws that went into effect on January 1, 2025.
• Provides guidance to healthcare providers, insurers, vendors, investors, and other healthcare entities that develop, sell, and use artificial intelligence and other automated decision-making systems.  

A New Era of Artificial Intelligence Policy and Regulation: 2023 to Present

Governor Newsom signed Executive Order N-12-23 in September 2023, as previously reported by CSAC, to create a framework for the state to develop an informed, evidence-based, and formal process to develop policy recommendations for the responsible use of artificial intelligence. Although the state’s actions and the structure of the Executive Order are similar to President Biden’s federal Executive Order that was signed in November 2023, the state takes the extra step of evaluating the impacts of artificial intelligence on issues specific to California, and acknowledges our state’s unique role as the “global hub for generative artificial intelligence.”

Legal Advisory: Application of Existing California Laws to Artificial Intelligence

Broadly, this legal advisory describes responsible stewardship of artificial intelligence systems by the private sector and the legal obligations for businesses and developers to maintain informed and transparent relationships with consumers wherein artificial intelligence is employed. The Attorney General is explicit that businesses are required to understand their artificial intelligence systems and that they are responsible for the output of their artificial intelligence systems, especially if the net result is harm or negligence. Put plainly, the Attorney General states that “Conduct that is illegal if engaged in without the involvement of AI is equally unlawful if AI is involved, and the fact that AI is involved is not a defense to liability under any law.” Ergo, this legal advisory reminds Californians that ignorance of the applicability of the law as society evolves is not justification to forgo compliance. Specific examples include, but are not limited to:

• Consumer Protection—It may be unlawful under California’s Unfair Competition Law to use AI to foster or advance deception or use AI to impersonate a government official in the execution of official duties (page 2).
• Transparency: AI decision-making affecting consumers— The Consumer Financial Protection Bureau recently clarified that creditors who use AI or complex credit models must still provide individuals with specific reasons when they deny or take another adverse action against an individual (page 4).
• Data Protection—The protections for personal information in the California Consumer Privacy Act apply to personal information in AI systems that are capable of outputting personal information (page 5).

While a majority of the guidance therein is targeted to the business community and consumers, components of this legal advisory that are most notable for local officials includes descriptions of the applicability of California’s election misinformation prevention laws and the use of artificial intelligence in election and campaign materials, as follows:

• California’s Election Misinformation Prevention Laws— Among other matters, California law prohibits the use of undeclared chatbots with the intent to mislead a person about its artificial identity in order to incentivize a purchase or influence a vote in an election, and, it is also impermissible to use AI to impersonate a candidate for elected office, or a candidate or initiative’s website (page 4).
• Use of Artificial Intelligence in Elections and Campaign Materials—Among other matters, California law requires any campaign advertisements generated or substantially altered using AI to include a disclosure of such, and, requires that large online platforms (with at least one million California users) develop and implement procedures to identify and remove materially deceptive election-related content (“deepfakes”) during specified periods before and after elections in California (page 6).

Legal Advisory: Application of Existing California Law to Artificial Intelligence in Healthcare

This legal advisory provides guidance to healthcare providers, insurers, vendors, investors, and other healthcare entities that develop, sell, and use AI and other automated decisions on the application of existing California law as it relates to the use of AI in healthcare. The advisory details entities’ obligations under California law, including under the state’s consumer protection, civil rights, data privacy, and professional licensing laws.

AI systems are already widely used within healthcare for medical diagnosis and treatment decisions, appointment scheduling, medical risk assessment, and bill processing. While AI has the potential to improve patient and population health and increase efficiencies within healthcare systems, AI also poses risks, such as discrimination, denials of needed care, and interference with privacy and autonomy.  The advisory calls for healthcare entities to ensure that AI systems are tested, validated, and audited to ensure AI use is safe and lawful, and reduces human errors and biases. Healthcare entities should also be transparent with patients about whether patient information is being used to train AI and how providers are using AI to make decisions affecting health and healthcare.

The advisory recognizes that the California Legislature and regulatory entities continue to develop laws and regulations addressing emerging technology and does not encompass all possible laws that may apply to health AI, including applicable federal requirements.