Maryland’s AI Toy Safety Act: State-Level Regulation Fills the Federal Void on AI in Children’s Products
On February 12, 2026, a bipartisan group of legislators in Maryland proposed the Maryland Artificial Intelligence Toy Safety Act. This proposed legislation aims to establish a sweeping regulatory framework for AI-enabled toys sold in the state, encompassing any device that utilizes machine learning, conversational AI, behavioral modeling, or similar computational processes, particularly those marketed to or primarily used by children.
Scope and Compliance
The proposed act’s scope is intentionally broad and introduces pre-market compliance obligations requiring manufacturers to conduct child safety assessments before introducing new AI toys to Maryland consumers. Toys already on the market as of July 1, 2026, must have their initial assessments completed by January 1, 2027. Violations of the act are classified as unfair, abusive, or deceptive trade practices under the Maryland Consumer Protection Act, exposing non-compliant manufacturers to civil penalties of up to $50,000 per violation and mandatory product recalls.
Data Privacy Requirements
The act imposes substantial data privacy requirements. Manufacturers are restricted to collecting only the minimal child user data necessary for core toy functionality, and all such data must be encrypted. The act prohibits the selling or transferring of child user data to third parties, using it to train unrelated AI models, targeting children with advertising based on that data, or retaining it for more than 12 months without renewed parental consent. In case of a data breach, manufacturers must notify affected parents or guardians within 48 hours of discovery, highlighting the legislature’s commitment to child data security.
Parental Controls and Content Restrictions
Toys containing AI must include accessible mechanisms for obtaining and revoking parental consent. Parents should be able to disable data collection without losing the toy’s core functionality. Furthermore, the toys are prohibited from generating content that is sexual, violent, emotionally manipulative, or instructional about harmful behaviors. The act mandates the incorporation of content moderation tools, age-appropriate conversational filters, and an automatic safe mode triggered by harmful or unknown inputs. Reflecting concerns about children’s psychological well-being, the act prohibits marketing AI toys as emotional companions, parental substitutes, or psychological counselors.
Enforcement and Oversight
The act establishes a dedicated enforcement and oversight infrastructure through the creation of the Artificial Intelligence Toy Safety Review Panel within the Consumer Protection Division of the Office of the Attorney General. This panel is responsible for reviewing manufacturer compliance, conducting independent audits of AI toys distributed to children in Maryland, and evaluating industry safety standards to recommend statutory updates. Beginning December 1, 2027, the panel must report annually to the General Assembly on its findings, indicating that the legislature views the act as a dynamic regulatory framework designed to adapt alongside advances in AI technology.
Federal Regulatory Landscape
While the future of this legislation remains uncertain, it reflects a concerted effort by lawmakers to address the perceived lack of regulatory oversight of AI in toys and other products used by children. Currently, the Consumer Product Safety Commission (CPSC) is not taking steps to apply its powers to the integration of AI technologies into toys. On February 13, 2026, the CPSC clarified that its statutory mission traditionally focuses on reasonably foreseeable risks of physical injury and that it is neither equipped nor authorized to evaluate non-physical hazards, such as mental, emotional, or psychological harm. The agency emphasized that extending its jurisdiction to such harms would constitute a novel expansion beyond the authority granted by Congress.
Conclusion
The divergence between state-level initiatives like Maryland’s AI Toy Safety Act and the federal stance indicates the need for consistent monitoring and flexibility in a rapidly evolving regulatory scheme. Although federal regulators are not currently addressing these issues, sellers and manufacturers of AI-enabled toys must remain vigilant regarding the potential for state-level regulatory actions and continue to monitor developments in this critical area.
