Texas Attorney General Ken Paxton settled with Pieces Technologies for making deceptive claims about the accuracy of its healthcare AI products used in Texas hospitals. The company advertised an error rate of '<1 per 100,000' which was found inaccurate. The settlement requires Pieces to accurately disclose product accuracy and ensure hospital staff understand the limitations.
Pieces Technologies must accurately disclose the accuracy metrics of its AI products and ensure that hospital staff are properly trained on the appropriate use and limitations of the products.
In-house legal teams should review vendor and customer agreements, particularly those involving AI or healthcare products, to address deceptive accuracy claims. Key clauses to examine include representations and warranties regarding product accuracy and performance metrics, disclosure obligations for error rates and limitations, compliance with healthcare regulations, indemnification provisions, and customer training requirements. Changes may be needed to specify verifiable accuracy standards, mandate explicit disclosure of model limitations, ensure hospital staff understanding through training clauses, and align warranties with actual product capabilities to prevent misleading practices.
Entity
Pieces Technologies
Industry
TechnologyOfficial Press Release
https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-reaches-settlement-first-its-kind-healthcare-generative-ai-investigation
Petition for Approval of AVC Pieces File Stamped
https://www.oag.texas.gov/sites/default/files/images/press/Petition%20for%20Approval%20of%20AVC%20Pieces%20File%20Stamped.pdf
Texas Attorney General Enforcement Page
https://www.texasattorneygeneral.gov/consumer-protection/privacy
Texas Attorney General Ken Paxton sued Open AI Global, LLC and affiliated entities, alleging that ChatGPT was marketed as safe and reliable without disclosing risks of inaccurate or harmful outputs. The suit also alleges harms to minors and collection of their data without parental oversight; the release states no monetary penalty or specific remedy imposed.
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$3.0M
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$773.0M
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$1.5M
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