- Anthropic faced scrutiny after a hidden tracking code in Claude Code was discovered, monitoring users in China without clear disclosure.
- The code, described as 'prompt steganography,' sent user data like time zones and proxy usage to Anthropic, raising privacy and trust concerns.
- Anthropic defended the tracker as an experiment to prevent unauthorized account abuse and distillation attacks, but critics called it a breach of user trust.
- In response, Alibaba banned employee use of Claude Code due to backdoor risks, highlighting legal and compliance implications for violations.