Judge urges Character.AI to hire privacy ombudsman for proposed Disney deal

US Bankruptcy Judge Brendan Shannon said at an October 30 hearing that he would "strongly encourage" Character Technologies, operator of Character.AI, to hire a privacy ombudsman to assess potential harm to children, but declined to order the appointment, Bloomberg reported. The scrutiny comes as Disney's $20 million technology license heads toward a proposed November 24 sale hearing, with states seeking independent privacy oversight of data collected from minors and other users. Character.AI drew 12 million monthly users while Character Technologies lost $8 million to $9 million a month and entered Chapter 11.

Judge urges Character.AI to hire privacy ombudsman for proposed Disney deal Judge Brendan Shannon urged Character Technologies to hire an expert on child harm and user privacy as Disney's $20M license heads toward a proposed November 24th sale hearing. By RuntimeWire Staff https://runtimewire.com/author/runtimewire-staff · Published · Updated Primary source: Bloomberg Technology https://www.bloomberg.com/news/articles/2026-10-30/ai-media-firm-needs-privacy-ombudsman-in-disney-deal-judge-says Why it matters Character.AI drew 12 million monthly users, yet Character Technologies lost $8 million to $9 million a month and landed in Chapter 11. States are seeking independent privacy oversight of any sale or transfer involving the intimate data collected from minors and other users. Character Technologies' proposed technology license to Disney drew a call for independent privacy scrutiny from US Bankruptcy Judge Brendan Shannon at an October 30th hearing. Shannon said he would "strongly encourage" the Character.AI operator to hire a privacy ombudsman to assess potential harm to children, but declined to order an appointment, Bloomberg reported https://www.bloomberg.com/news/articles/2026-10-30/ai-media-firm-needs-privacy-ombudsman-in-disney-deal-judge-says?ref=runtimewire .… When you purchase through links in our articles, we may earn a small commission https://runtimewire.com/affiliate-monetization-standards . This doesn’t affect our editorial independence.