Using AI to build your business: Three decisions with legal risks

Thinking of becoming self-employed or starting your own business? Chances are, AI is already one of the first places you turn to for ideas, advice and guidance. You can ask it what you could offer, and it can suggest services and a marketing strategy in minutes.

It can also help you execute your plan, launch your website, connect your tools and create a chatbot to answer client enquiries while you sleep. It's like having a sounding board, business coach and assistant all rolled into one. It also makes turning your ideas into an actual business easier, more exciting and more affordable.

However, while AI makes it easier to get started, the decisions you make with its help can also carry legal risks. Here are three decisions people often overlook:

1. The jurisdiction trap you never saw coming

AI makes it easier than ever to market your goods and services worldwide. With content creation, advertising and reaching potential clients now just a few clicks away, why limit yourself?

Still, when you actively target consumers in different countries, their local consumer protection laws may also apply. These can affect your cancellation terms, refunds and the information you need to provide before someone makes a purchase. What works for your customers in Switzerland may not necessarily work for those in Germany or the UK.

Suddenly, you could find yourself dealing with laws you never even considered when you decided to offer your goods or services internationally.

So, before following AI's global expansion plan, ask yourself whether you have the time, financial resources and operational capacity to handle the legal responsibilities that come with serving different markets. Just because AI makes it easy to reach clients worldwide doesn't mean you're ready to serve them worldwide.

2. The AI-built website that is a data protection nightmare

More and more business owners are relying on AI to write their website copy, build booking systems, create payment links and even draft their privacy policies. In a weekend, you can have a professional-looking website and start accepting clients. Everything looks ready because AI has given you the finished result.

However, what you don't see are all the decisions and processes happening behind it. The moment your website starts collecting names, email addresses, booking details or other personal information, data protection responsibilities come into play.

Do you know which companies are processing that information, where it goes and what happens when someone asks for it to be deleted? What about that generic privacy policy AI drafted for you? If it doesn't reflect how your business actually handles personal data, it could create even more problems.

Depending on where you operate and whom you target, different data protection laws may apply. For example, businesses operating in Switzerland must comply with the Swiss Federal Act on Data Protection (FADP). Furthermore, if you actively target customers in the EU, the EU General Data Protection Regulation (GDPR) may also apply, even if your business is based elsewhere.

Failing to meet these obligations can expose you to complaints, regulatory action, potential fines and, perhaps most damaging of all, the loss of your clients' trust.

That's the thing with AI. It gives you the finished website without necessarily helping you understand the decisions made behind it. Just because everything works doesn't mean everything is compliant.

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3. Your AI employees, your responsibility

A chatbot you built in an hour can answer questions, recommend services and handle enquiries any time of the day. An AI agent you set up in minutes can take over some of your tasks and an app you created over the weekend can considerably reduce your workload.

Still, here's something you may not have considered. These chatbots, agents and apps are like your little employees and you're responsible for them.

When a visitor or client interacts with them, they don't necessarily distinguish between what your AI says and what your business says. The advice it gives may be taken as your advice. The promises it makes may be understood as promises from your business.

The problem? AI can make mistakes.

Imagine your chatbot promising a full refund when your terms say otherwise or giving a client advice that turns out to be wrong. If visitors share personal information through your chatbot, agent or app, that is another data protection obligation to consider. Just like with your employees, you cannot simply blame the tool when something goes wrong.

That's why, before allowing your AI employees to interact with the public, make sure you know what they can say, what they can do and what information they can access. Test them, set boundaries and decide when a human needs to step in.

The decision AI cannot make for you

AI can help your business but it should not be the business owner. You are.

Remember, the more you depend on it, the greater the legal risks and potential damage to your clients' trust. That's why you need to put more safeguards in place and be more intentional about how you use AI.

So the bigger question is not whether you should use AI in your business. It's whether you are legally ready to run the business you're building with it.