For general counsel, privacy officers, and compliance teams deploying AI chatbots, call center software, or transcription tools, a wave of decades-old wiretapping statutes has become an unexpected new source of litigation exposure.
In Eavesdropping by Algorithm: How Courts Are Applying Decades-Old Privacy Laws to AI, published in New York Law Journal, Frances M. Green, Of Counsel at Epstein Becker Green and counsel to companies on cybersecurity, data privacy, and AI governance compliance, and Megan Archibald, Associate at Epstein Becker Green and defense counsel to employers on litigation, compliance, and workplace investigations, trace how the federal Wiretap Act, the Electronic Communications Privacy Act, and state analogs such as California's Invasion of Privacy Act are being applied to AI chatbots and transcription tools.
Green and Archibald trace the wave back to Javier v. Assurance IQ, which held that consent given after a website already began collecting data was not valid consent. That principle now reaches AI customer service tools, with courts split: in Taylor v. ConverseNow Technologies, a federal court let wiretapping claims proceed against an AI voice assistant used by a pizza chain, while in Lisota v. Heartland Dental, a different court dismissed similar claims under the Wiretap Act's "ordinary course of business" exception. As Green wrote, "consent obtained after recording begins is no consent at all."
The authors flag AI transcription tools used in health care settings as the next area of exposure, alongside new disclosure laws in California, New York, Washington, Nebraska, and Idaho. They recommend auditing which AI tools run on customer-facing platforms, moving consent ahead of data collection, naming vendors specifically in privacy policies, and confirming vendor contracts limit data use to service delivery.
Get in Touch
To discuss how your organization can assess AI vendor exposure under wiretapping and privacy laws, contact Frances Green at fgreen@ebglaw.com or Megan Archibald at marchibald@ebglaw.com.
