Air Canada Must Pay The Refund Promised By The AI chatbot, The Arbitration Tribunal Rules

Air Canada must pay a Vancouver man a partial refund of his airline ticket that the website's chatbot promised him, a Canadian court ruled Wednesday in a potentially groundbreaking case for the use of artificial intelligence in business.

Jake Moffatt asked the airline's artificial intelligence support chatbot if the airline offered bereavement fares in November 2022 following the death of his grandmother. The chatbot said the airline offered discounted fares and Moffat could get the discount up to 90 days after the flight by submitting a claim.

However, the airline's actual bereavement policy does not provide for post-flight refunds and specifically states that the discount must be approved in advance.

Moffat booked and flew from Vancouver to Toronto and back for about $1,200 and later applied for the promised discount of about half, but was informed by the airline's support staff that the chatbot's answers were incorrect and non-binding.

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

Tribune member Christopher Rivers ruled in Moffat's favor on Wednesday, finding that the airline committed a “negligent misrepresentation” and that it must honor the chatbot's promised discount.

“This is a remarkable contribution,” he wrote. “Although a chatbot has an interactive component, it is still only part of Air Canada's website. Air Canada should be clear that it is responsible for all information on its website. It doesn’t matter whether the information comes from a static page or a chatbot.”

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

“I feel that Air Canada did not take adequate care to ensure that their chatbot was accurate,” Rivers continued. “Although Air Canada argues that Mr. Moffatt was able to find the correct information on another part of its website, this does not explain why the website entitled “Grief Journeys” was inherently more trustworthy than its chatbot. Nor does it explain why customers need to double-check information they find in one part of their website in another part of their website.”

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