AI | AGCM opens investigation into Nova AI over lack of transparency on hallucinations

On 1 August 2025, the Italian Competition Authority (AGCM) launched proceedings PS12973 against ScaleUp Yazılım Hizmetleri Anonim Şirketi (ScaleUp), developer of the Nova AI chatbot, for suspected unfair commercial practices under the Italian Consumer Code. According to AGCM, the chatbot – available in Italy via website and mobile app – allegedly failed to clearly and immediately inform users of the risk that the AI may generate inaccurate, misleading or entirely fabricated content, commonly known as “hallucinations”. AGCM considers this information essential for enabling consumers to make informed decisions about using the service, particularly in light of the chatbot’s potential applications in sensitive areas such as health, finance and law. AGCM stressed that transparency regarding the limits of AI systems is fundamental to maintaining user trust and that omitting such disclaimers could result in overestimating the reliability of the service. ScaleUp has been requested to provide detailed information about the service, including its technical foundations, marketing practices, and user base, within 30 days from receipt of AGCM’s notice.

Newsletter n. 111 – October 2025