Two-Party Consent

When two people talk on the phone and one of them records the call, a legal question arises: does the other person need to know and permit it? In many jurisdictions, the answer is yes. This is exactly what Two-Party Consent means: a recording is only permitted if all participants in the conversation have agreed to it. The name originates from US law, where individual states have enshrined this rule in statute. Its counterpart is called One-Party Consent, which only requires the consent of a single participant – usually the person doing the recording. Although the name refers to two parties, the rule also applies to larger groups: in that case, everyone must consent, which is why it is sometimes referred to more precisely as All-Party Consent.

Why recording AI hinges on this rule

The term is currently coming up mainly because more and more software is automatically listening in on conversations. Meeting assistants transcribe video conferences, summarize them, and derive tasks from them. Sales teams have customer phone calls analyzed to extract tips for better conversations. Technically, this problem has long been solved. Legally, every one of these recordings constitutes a recording within the meaning of the law.

For companies, this is no side issue. In California, for example, unauthorized recordings can trigger claims for damages, per affected person and per conversation. For a call center handling thousands of calls a day, this quickly adds up to serious amounts. There have already been class-action lawsuits against providers of conversation analysis software. Investors therefore pay close attention to how cleanly consent is handled at companies operating in this space.

In Germany, the term as such does not exist, but the outcome is stricter. Secretly recording non-public spoken words is a criminal offense here under the Criminal Code. On top of that come the rules of the General Data Protection Regulation, since a voice recording contains personal data. Anyone who simply transfers a US product to Europe has a problem.

How consent is obtained

Consent does not need to be signed, but it does need to be verifiable. The classic example is the announcement at the start of a phone call: This call is being recorded for quality purposes. Anyone who continues speaking after that is, in many jurisdictions, considered to have tacitly consented. Lawyers call this implied consent.

In video conferences, it works similarly, only more visibly. If someone starts the recording, a notification window with a red dot appears for everyone. Some systems additionally require a click on Agree before proceeding. If a participant joins later, they must receive the notice again. These latecomers are exactly the kind of common mistake made in practice.

A common misconception is that consent applies permanently. In fact, it relates to a specific conversation and a specific purpose. Someone who allows a meeting to be transcribed has not thereby allowed the recording to later train an AI model. Reputable providers therefore keep these two questions cleanly separated.

From smart glasses to customer phone calls

The issue becomes most visible with devices worn on the body. Glasses with a built-in camera and microphone record their surroundings without bystanders having been asked. Manufacturers address this with a light that blinks during recording. Whether a blinking light is legally sufficient as consent is disputed.

In everyday life, the rule is also encountered with every call to a hotline. The recorded announcement at the beginning is not a mere courtesy phrase, but a legal safeguard. The recording function in Zoom, Teams, or Google Meet also follows this principle. Anyone who secretly records an exam or a job interview risks facing a criminal complaint in Germany.

For startups, Two-Party Consent has meanwhile become a selling point. Anyone who can demonstrate that their assistant automatically obtains and logs consent stands a chance of making the shortlist at banks and law firms in the first place. Product descriptions therefore often mention consent management. Behind this lies simply the question of whether everyone in the room knew that a transcript was being made.