chatbot-law-site-donotpay-settles-with-ftc

Chatbot Law Site DoNotPay Settles With FTC

Humanoid mini robot with HUD hologram screen doing hand raised up on white background. Technology and innovative concept. 3D illustration renderingIn 2015, tech twerp Joshua Browder founded his company DoNotPay.com from his dorm room at Stanford. The story, perhaps apocryphal, was that he got so many parking tickets that he invented a chatbot to scour local ordinances and interface with municipal authorities.

“I couldn’t afford to pay these tickets as a young person, so I became a legal expert about all the reasons why people could get out of parking tickets,” said the son of hedge fund manager Bill Browder.

In short order, young Josh was induced to drop out of college and join Peter Thiel’s brotherhood of very special boys to whom the rules do not apply. Soon he was swimming in vats of VC cash from the likes of Andreessen Horowitz and Coatue Management. The pressure was on to come up with the next big thing and prove them all right. And what he came up with was an AI chatbot that he dubbed “the world’s first robot lawyer.”

“Lawyers are charging hundreds of dollars an hour for copying and pasting a few documents, and our vision at DoNotPay is to make the law free,” the website said, promising glibly to generate demand letters, defamation C&Ds, divorce settlements, restraining orders, trusts, and even lawsuits in small claims court. Browder’s company DoNotPay charged a monthly subscription to access his stable of bots, and, to gin up publicity, he tweeted that he’d pay an attorney to wear an earpiece and let his bot argue a case at the US Supreme Court.

This was perhaps a strategic error, since it simultaneously attracted the attention of every lawyer on social media and highlighted Browder’s complete lack of understanding of LAW, HOW DOES IT GO? It also implied that the young CEO was getting high on his own supply, as it were, and failing to consult any actual lawyers. (Spoiler Alert!)

Browder soon beat a hasty retreat, vowing that he’d try to refrain from practicing law without a license, and congratulating himself for being so good at this whole CEO thing that he knew when to course correct.

Specifically, lowering medical bills, cancelling subscriptions, disputing credit reports, among other things, with A.l. I think it’s very important for companies to stay focused. Unlike courtroom drama, these types of cases can be handled online, are simple and are underserved.

— Joshua Browder (@jbrowder1) January 25, 2023

But while the internet mostly got bored and wandered off, the Federal Trade Commission did not. And this morning it announced a settlement with DoNotPay, wherein Browder agreed that his company would cough up $193,000 and promise to go forth and sin no more. Looks like they DO pay after all!

As with everything involving Josh Browder, the FTC complaint is hilarious.

The donotpay.com website has prominently featured a quote that purports to come from The Los Angeles Times newspaper and states, “What this robot lawyer can do is astonishingly similar – if not more – to what human lawyers do.” Compl. Exh. F. In fact, the foregoing quote derives from a high-schooler’s opinion piece in the Los Angeles Times’ High School Insider website, a user-generated content platform for young people.

And while the company was making grandiose representations about the quality of its product, DoNotPay consulted zero attorneys who could have told it that the documents its bots were spitting out were drek.

DoNotPay did not test whether the Service’s law-related features operated like a human lawyer. DoNotPay has developed the Service based on technologies that included a natural language processing model for recognizing statistical relationships between words, chatbot software for conversing with users, and an Application Programming Interface (“API”) with OpenAI’s ChatGPT. None of the Service’s technologies has been trained on a comprehensive and current corpus of federal and state laws, regulations, and judicial decisions or on the application of those laws to fact patterns. DoNotPay employees have not tested the quality and accuracy of the legal documents and advice generated by most of the Service’s law-related features. DoNotPay has not employed attorneys and has not retained attorneys, let alone attorneys with the relevant legal expertise, to test the quality and accuracy of the Service’s law-related features.

Better late than never, Browder opted not to use a bot to interface with the FTC, instead hiring counsel from Wilson Sonsini, which also represented him in a recently settled consumer class action suit in California.

The FTC alleges that DoNotPay made false claims and engaged in unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act. But interestingly FTC Chair Lina Khan and Commissioner Melissa Holyoak put out a joint statement suggesting that Browder’s real sin was destroying consumers’ belief in the power of AI, including with respect to generating legal documents.

For consumers to benefit from AI (as with any technology), they must be able to trust the claims that companies make about its capabilities. Importantly, this settlement does not suggest that consumers should use expensive professional services, or that companies should avoid offering innovative products that reduce the need for high-priced lawyers. The misdeeds of a few bad apples shouldn’t dampen pro-consumer innovation. Indeed, we are hopeful that AI will give consumers access to many types of services at lower cost and with greater convenience than has previously been available.

As ATL editor Joe Patrice has pointed out, no lawyer is going to take a traffic court case, and having a reliable AI tool that walks normal people through the process and points to potential defenses is a net positive. Perhaps Browder’s sin was flying too close to the sun. Or maybe he’s just a tech douchebag who got handed a mountain of cash and told he was smarter than everyone else so he didn’t need to follow the rules, and he got what was coming to him.


Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.