break Shares closed down 5% on Thursday after the Federal Trade Commission said it would refer its complaint against the company to the Justice Department.

The FTC said in a statement that its private complaint involves allegations that Snapchat’s My AI chatbot posed “risks and harm” to young users. The complaint stems from an FTC compliance review of Snap in 2014 settlement on public allegations of deception related to the company’s data collection.

As part of the FTC’s compliance review of Snap, the agency said it has discovered the possibility that the company “is violating or is about to violate the law.”

“This lawsuit is in the public interest,” the FTC said in a statement.

The FTC did not specify that its complaint focuses on the My AI chatbot, but the chatbot has come under scrutiny before.

A Snap spokesperson disputed the FTC’s claims in a statement to CNBC.

“Unfortunately, on the final day of this administration, a divided FTC decided to vote down a proposed complaint that failed to consider any of these efforts, was based on inaccurate information, and lacked “It also fails to establish any tangible harm and raises serious First Amendment concerns.”

The spokesperson added that while the company shares the FTC’s “commitment to ensuring the thoughtful development of generative AI,” Snap believes “this complaint will stifle innovation and competition in a critical and growing area of ​​the economy.”

break debut My AI chatbot in 2023. it is powered Through OpenAI and Google’s large language models, it can answer user questions and provide tips and suggestions similar to ChatGPT and other artificial intelligence chat tools.

The chatbot is known for providing questionable responses. In one instance, while speaking to a reporter pretending to be a teenager, the chatbot answered and explained how to hide the smell of alcohol and marijuana, The Washington Post reported report 2023. When the chatbot was first released, Snap explain My AI, like other AI-driven chatbots, is “prone to hallucinations and can be tricked into saying anything. Please be aware of its many flaws, and apologize in advance!”

October 2023, UK Information Commissioner’s Office release In response to Snap’s preliminary enforcement notice, accusation The company’s MyAI-related risk assessment “does not adequately assess the data protection risks posed by the technology that generates AI, in particular to children.”

While the FTC said it voted in a closed session to make a public statement on the case against Snap and its subsequent referral to the Justice Department, it noted that FTC Commissioner Melissa Holyoak and Andrew Ferguson were absent.

The FTC also noted Statement of objection By Ferguson, President-elect Donald Trump December naming Successor to Lina Khan as next Chair of the Federal Trade Commission (FTC).

Ferguson noted that such referrals “are not disclosed unless the Department of Justice or the Commission files a lawsuit in court.”

“I was not present at the farcical closed-door meeting where this was approved,” he wrote.

Ferguson added that he opposed the FTC complaint against Snap but that he could not “release a detailed analysis of its many issues” because the case was not public. Ferguson wrote that the complaint’s interpretation of FTC law is “wrong” and “in direct conflict with First Amendment guarantees.”

Ferguson said he would “issue a more detailed statement regarding this violation of the Constitution and the rule of law” if the Justice Department files a complaint.

watch: Snap CEO talks profit growth, new ad products