NetChoice strongly opposes Michigan Senate Bill 760, Leading Ethical AI Development for Kids Act. While the goal of protecting children from online harms is one we share and take seriously, SB 760 is constitutionally and technically flawed and would harm the very young people it seeks to protect — while exposing Michigan businesses to unpredictable liability and chilling innovation across the state.
Watch NetChoice’s testimony live here: https://www.facebook.com/MichiganSenateDemocrats/videos/2596776687359516/?rdid=XxgIWJLZiEaHfwSv
NetChoice Testimony in Opposition to MI SB 760, LEAD for Kids Act
March 4, 2026
Michigan Legislature
Michigan Senate Committee on Finance, Insurance, and Consumer Protection
Dear Chair Cavanagh, Vice-Chair Irwin, Minority Vice-Chair Huizenga and Members of the Committee:
On behalf of NetChoice, a trade association working to make the internet safe for free enterprise and free expression, I write to express our strong opposition to Senate Bill 760, Leading Ethical AI Development for Kids Act. While the goal of protecting children from online harms is one NetChoice shares and takes seriously, SB 760 is constitutionally and technically flawed and would harm the very young people it seeks to protect — while exposing Michigan businesses to unpredictable liability and chilling innovation across the state.
NetChoice is a trade association of leading internet businesses that promotes the value, convenience, and choice that internet business models provide to American consumers. Our mission is to make the internet safe for free enterprise and free expression.
SB 760’s Overly Broad Definitions will Sweep Up Legitimate, Beneficial Applications
The bill defines a companion chatbot as any generative AI system that retains prior session information, asks unprompted emotion-based questions and sustains an ongoing personal dialogue. On its face, this definition would capture a breathtaking range of beneficial tools, including:
- AI tutoring platforms that track a student’s learning progress and check in on how they are feeling about difficult material;
- Mental health and wellness apps that maintain context across sessions in order to provide continuity of care;
- Educational tools that personalize content and offer encouragement to young learners; and
- Accessibility tools that assist users with disabilities through emotionally attuned, context-aware interactions.
The carve-outs provided in subdivision (d) — for customer service, research tools, and internal business tools — do not come close to addressing the vast middle ground of legitimate consumer-facing AI applications that would be swept into the bill’s reach. Michigan entrepreneurs, startups and technology companies would face an uncertain compliance burden from the day this law takes effect.
The Strict Liability Standard will Lead to Privacy Invasive Age Verification
Section 5(2) provides that beginning January 1, 2027, an operator need not have “actual knowledge” that a user is a minor in order to be held liable. This creates, in effect, a strict liability standard for every AI interaction that could plausibly involve a minor — regardless of whether the operator has taken any steps to determine user age.
This provision has two fundamental problems. First, it would compel operators to implement age verification systems as the only practical means of compliance. Courts have repeatedly found that age verification mandates conditioning access to lawful speech are unconstitutional under the First Amendment. Federal courts have enjoined similar laws in California, Utah, Arkansas, Ohio, Louisiana, and Texas, each time finding that the burden on protected speech is not narrowly tailored to a compelling state interest. Michigan’s version would face the same fate, wasting state resources in costly and inevitable litigation.
Second, as the Supreme Court has made clear, the First Amendment protects the right to access lawful information — including information generated by or communicated through AI systems. An AI chatbot is not meaningfully different from a book, a movie, a newspaper, or a website as a medium through which ideas and information flow. Justice Scalia’s oft-cited reminder remains apt: states do not possess a free-floating power to restrict the ideas to which children may be exposed. The state’s interest must be clear, and the regulatory means must be narrowly tailored. A blanket strict liability standard tied to the mere possibility of minor access does not meet that standard.
The Private Right of Action Creates Unacceptable Litigation Risk
Section 7 provides that any covered minor who suffers “actual harm” may bring a civil suit for actual damages, punitive damages and attorney fees. Combined with the strict liability standard taking effect, this creates an enormous and open-ended exposure for any company operating an AI product in Michigan. The ambiguity in the bill’s core definitions — what exactly makes a chatbot a “companion” chatbot? What constitutes “optimizing engagement” in a prohibited manner? — means that Michigan companies will face unpredictable liability that cannot be managed through reasonable compliance programs.
The result will not be safer AI for children. It will be a flight of AI investment and development from Michigan to states with clearer and more reasonable regulatory environments, depriving Michigan residents of access to innovative tools and Michigan workers of jobs in a high-growth sector.
Parents, Not Government Mandates, are Best Positioned to Protect Children Online
NetChoice agrees that children deserve meaningful protections online, and that AI developers have real responsibilities when their products are used by minors. The question is not whether to protect children — it is how. Blunt, overbroad legislation that triggers constitutional infirmity, drives away investment and restricts access to beneficial technology is not the answer.
Michigan should instead pursue approaches that empower parents, increase transparency about AI capabilities and encourage industry best practices — tools that protect children without restricting the lawful speech and innovative activity of everyone else. NetChoice and its members stand ready to work with the Committee on such constructive alternatives.
SB 760 is well-intentioned but fundamentally flawed. Its definitions are overly broad, its vague prohibitions invite litigation abuse and its practical effect will be to harm Michigan’s technology economy while doing little to make children meaningfully safer. NetChoice respectfully urges the Committee to reject SB 760 and to pursue targeted, constitutionally sound alternatives. We appreciate the opportunity to provide the committee with our thoughts on this important matter (The views of NetChoice expressed here do not necessarily represent the views of NetChoice members).
Sincerely,
Amy Bos
Vice President of Government Affairs
NetChoice
NetChoice is a trade association that works to make the internet safe for free enterprise and free expression.