Toronto (Agencies): In a landmark ruling, a court has ordered Air Canada to reimburse a passenger due to misleading information provided by the airline’s chatbot. The case underscores growing concerns about corporate management of AI chat systems as businesses increasingly adopt service automation.

The passenger, Jake Moffatt, purchased a round-trip flight ticket from Vancouver to Toronto for approximately $1,200 in 2022. Following the death of his grandmother in November 2022, he inquired about bereavement fares through the airline’s automated chat system. The chatbot informed Moffatt that the airline offered discounted fares, with a 90-day window following the flight during which he could claim the discount. However, Air Canada’s bereavement policy does not allow for refunds after the flight and requires discounts to be approved in advance.

When Moffatt later attempted to redeem the discount, the airline’s support staff informed him that the chatbot’s responses were incorrect and held no contractual significance. During the court proceedings, Air Canada argued that the chatbot operated as a “separate legal entity” from the company, thereby disclaiming responsibility for its interactions with customers.

Tribunal member Christopher Rivers ruled in Moffatt’s favor, determining that the airline had committed “negligent misrepresentation” and mandated 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.

While Air Canada maintained accurate information on its website, Rivers questioned why the company failed to justify why the ‘Bereavement Travel’ webpage was considered more reliable than its chatbot. This ruling represents a significant moment in defining the role of artificial intelligence in the business world.

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