Air Canada must pay refund promised by AI chatbot, tribunal rules

Air Canada must pay a Vancouver man a partial refund for his flight ticket that was promised by the site’s chatbot, a Canadian tribunal ruled Wednesday, in what could be a landmark case for the use of artificial intelligence in business.

Jake Moffatt asked the airline’s artificial intelligence support chatbot whether the airline offered bereavement fares in November 2022, following the death of his grandmother. The chatbot said the airline does offer discount fares and that Moffat could receive the discount up to 90 days after flying by filing a claim.

The airline’s actual bereavement policy, however, does not include a post-flight refund, and specifically states the discount must be approved beforehand.

Moffat booked and flew from Vancouver to Toronto and back for about $1200, and later requested the promised discount of about half off but was told by the airline’s support staff that the chatbot’s replies were incorrect and nonbinding.

Air Canada argued in the civil tribunal that the chatbot is a “separate legal entity” to the company, and that it could not be held responsible for its words to customers. 

Tribune member Christopher Rivers ruled in favor of Moffat on Wednesday, determining the airline committed “negligent misrepresentation” and it must follow through with the chatbot’s promised discount. 

“This is a remarkable submission,” he wrote. “While a chatbot has an interactive component, it is still just a part of Air Canada’s website. It should be obvious to Air Canada that it is responsible for all the information on its website. It makes no difference whether the information comes from a static page or a chatbot.”

Rivers ordered Air Canada to pay Moffat the promised $483 refund plus nominal fees.

“I find Air Canada did not take reasonable care to ensure its chatbot was accurate,” Rivers continued. “While Air Canada argues Mr. Moffatt could find the correct information on another part of its website, it does not explain why the webpage titled ‘Bereavement travel’ was inherently more trustworthy than its chatbot. It also does not explain why customers should have to double-check information found in one part of its website on another part of its website.”

The support chatbot, launched last year, was not visible on the airline’s website as of Sunday.