The World Forum - April 21st, 2024

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Court Orders Air Canada to Pay Up For Chatbot Blunder


A passenger's lawsuit against Canada's leading commercial airline has highlighted apprehensions surrounding corporate management of AI chat systems as the general trend toward service automation is gradually adopted by 21st-century businesses.

A court has ordered Air Canada to reimburse a passenger for a portion of his airfare due to misleading information by the website's chatbot that caused him to purchase a full-price ticket.

The ruling issued on Wednesday represents a watershed moment in defining the role of artificial intelligence in the business world.

In this case, a passenger named Jake Moffatt purchased a round-trip flight ticket from Vancouver to Toronto for about $1,200 in 2022 and inquired about bereavement fares through the airline's automated chat system following the death of his grandmother in November 2022.

The Air Canada chatbot informed Moffatt that the airline did indeed offer discounted fares, with a 90-day window following the flight during which he could claim the discount. The airline's bereavement policy, however, did not allow for refunds after the flight, requiring approval for discounts to be obtained in advance.

When Moffatt later sought to redeem the discount, the airline’s support staff informed him that the chatbot's responses were erroneous and constituted no contractual significance.

During court proceedings, Air Canada contended that the chatbot operated as a "separate legal entity" from the company, thereby disclaiming responsibility for its interactions with customers.

However, tribunal member Christopher Rivers ruled in Moffatt’s favor, determining that the airline had committed "negligent misrepresentation" while mandating compliance with the chatbot's promised discount.

Moffatt was awarded C$650.88 ($483) by the Canadian court, reflecting the discrepancy between his flight expenditure and the discounted bereavement fare from Air Canada, in addition to C$36.14 (almost $27) in pre-judgment interest and C$125 (over $92) in fees.