In September, the US Federal Trade Commission (FTC) began examining AI-powered chatbots that claim to serve as companions, coaches, or confidants. These tools, powered by generative AI, simulate emotional connection and are increasingly promoted as a source of friendship or support. While this technology offers potential benefits, its rise has sparked unease over how it might shape the behaviour and emotions of vulnerable users, especially children and teenagers.
The FTC’s inquiry is not an enforcement action but a fact-finding effort targeting seven major firms: Alphabet, Character Technologies, Instagram, Meta Platforms, OpenAI, Snap, and X.AI. The goal is to understand how these companies design and monitor their products, what safeguards exist for young users, and how they monetise user engagement. Regulators also want to know whether these firms disclose potential risks and comply with child protection laws such as the Children’s Online Privacy Protection Act.
This level of scrutiny is overdue. For years, the tech industry has operated with minimal accountability, often prioritising engagement over ethics. AI companions take this dynamic to a new level by building relationships that feel personal but are ultimately shaped by algorithms designed to hold attention. When the business model rewards time spent and emotional disclosure, the line between connection and manipulation becomes blurred. The FTC is right to ask how far these systems go in exploiting human vulnerability.
Supporters of the inquiry, including children’s rights advocates, see this as a vital intervention. They argue that AI companions may pose deeper risks than traditional social media because the illusion of empathy can lead users to share personal details without understanding the implications. Yet industry voices warn that excessive regulation could stifle innovation, particularly in areas like education, eldercare, and mental health, where conversational AI has promising uses. This concern is valid, but it should not outweigh the need for ethical oversight. Responsible innovation must come with clear boundaries.
What makes the FTC’s approach significant is its focus on the entire ecosystem. Companion AIs depend on app stores, messaging platforms, and mobile networks, which means accountability cannot rest solely with developers. Operators and vendors must also ensure that their infrastructure supports transparency, parental controls, and proper content classification. In a digital economy where trust is increasingly fragile, those who can demonstrate genuine compliance and user protection will earn long-term credibility.
There is another lesson here. The mobile and messaging industries have previously navigated similar regulatory transitions around fraud prevention and data privacy. Those experiences show that oversight does not necessarily hinder growth. It can strengthen it by building user confidence. The same could apply to AI companions if companies embrace the FTC’s inquiry as a chance to define standards that protect users while enabling innovation.
AI companionship has enormous potential for good, but without ethical grounding, it risks becoming another technology that preys on emotion for profit. Regulation should not be seen as a brake on progress but as a framework for trust. The FTC’s investigation signals that emotional intelligence in AI must be matched by institutional intelligence in how it is governed.
Dario Betti is CEO of the Mobile Ecosystem Forum (MEF), a global trade body founded in 2000 and based in the UK. MEF promotes cross-industry best practices, anti-fraud initiatives, and monetisation while fostering global collaboration across the mobile sector.
