🚨AI&Tech Legal Digest || November 1, 2024
Anita Yaryna
Senior IP & Tech Legal Counsel | US-EU Product, Privacy, and Policy Counsel | AI Advisor | Commercial Counsel
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Ireland Unveils Stringent Safety Code for Video-Sharing Platforms with €20M Penalty Cap
Ireland's media regulator, Coimisiún na Meán, has introduced a comprehensive online safety code targeting video-sharing platforms headquartered in Europe's tech hub. The new regulatory framework, effective next month, sets mandatory standards for major platforms including TikTok, Facebook, Instagram, LinkedIn, and YouTube. The code specifically addresses critical safety concerns by prohibiting content promoting cyberbullying, self-harm, eating disorders, terrorism, child sexual abuse material, and discriminatory content. Additionally, it mandates robust parental controls and measures to shield minors from inappropriate content such as pornography and gratuitous violence.
The enforcement mechanism includes substantial penalties for non-compliance, with fines reaching up to €20 million or 10% of annual turnover, whichever is higher. Platforms are granted a nine-month implementation period for technical compliance requirements. This initiative aligns with the broader EU Digital Services Act (DSA) framework and represents Ireland's strategic position as a key regulator of global tech platforms. Online Safety Commissioner Niamh Hodnett emphasized this as a crucial step in establishing a comprehensive regulatory framework, positioning Ireland at the forefront of digital safety governance.
U.S. Appeals Court Challenges FCC's Authority in Net Neutrality Revival Battle
A significant legal confrontation unfolded at the 6th U.S. Circuit Court of Appeals as judges expressed doubts about the Federal Communications Commission's authority to reinstate net neutrality rules. During the hearing, the three-judge panel scrutinized the FCC's legal basis for reclassifying broadband internet as a telecommunications service - a crucial designation that would grant the agency broad regulatory powers. The case, which has already seen the court temporarily block the FCC from enforcing these rules in August, centers on whether the agency has overstepped its statutory authority in attempting to implement regulations requiring internet service providers to treat all internet data and users equally.
The court's skepticism manifested particularly around the "major questions" doctrine, with Judge Richard Allen Griffin questioning the FCC's shifting positions across different administrations. The telecom industry, represented by attorney Jeff Wall, argues that this significant regulatory shift requires explicit Congressional authorization rather than agency action. Meanwhile, major tech companies including Amazon, Apple, Alphabet, and Meta Platforms continue to back the FCC's position. The case's outcome could fundamentally reshape the landscape of internet regulation, as the rules would prohibit internet service providers from blocking, slowing down traffic, or engaging in paid prioritization of lawful content, while also expanding the FCC's oversight of Chinese telecom companies and internet service outages.
EU Commission Validates French Gambling Monopoly Fee Structure After State Aid Investigation
The European Commission has concluded that Française des Jeux's (FDJ) monopoly fee structure complies with EU competition rules, following a comprehensive state aid investigation. The decision affirms the legality of France's privatization framework, which grants FDJ exclusive rights for lottery games and offline sports betting operations over a 25-year period. The investigation, triggered by two complaints in 2020 alleging unfair state aid, led to a recalculation of the monopoly fee from the initial €380 million to €477 million, a figure now deemed compliant with EU regulations.
The ruling sparked a 6% surge in FDJ's shares on the Paris stock exchange and provides crucial validation of France's gambling regulatory framework. This development follows the French Conseil d'Etat's April 2023 decision and represents a significant milestone in establishing the legal robustness of FDJ's privatization structure. The Commission's decision effectively closes a chapter of regulatory uncertainty that has surrounded France's gambling sector since the 2020 complaints.
The Commission's approval marks a pivotal moment for the European gambling sector, setting a precedent for future privatization efforts and monopoly fee structures. The adjustment of the monopoly fee calculation parameters demonstrates the EU's commitment to ensuring fair competition while acknowledging the unique position of state-sanctioned gambling operators. FDJ's formal acknowledgment of the revised fee structure further solidifies the regulatory framework's stability within the European single market.
Brazilian Consumer Rights Group Launches $525M Legal Battle Against Social Media Giants Over Minor Protection
Brazil's Collective Defense Institute has initiated significant legal action against TikTok, Kwai, and Meta Platforms' Brazilian operations, seeking 3 billion reais ($525.27 million) in damages. The lawsuits allege these platforms have failed to implement adequate safeguards to prevent unrestricted usage by minors. The legal challenge demands the establishment of clear data protection mechanisms and mandatory warnings about platform addiction risks to children's and teenagers' mental health, backed by studies demonstrating potential harm from unsupervised social media use.
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The legal action emerges amid heightened scrutiny of social media regulation in Brazil, following recent controversies involving X (formerly Twitter) and Brazilian authorities. Meta Platforms has responded by highlighting its decade-long commitment to youth safety, citing over 50 existing tools and resources, while announcing plans to introduce a new "Teen Account" feature on Instagram in Brazil that promises enhanced protection through automatic limitations on account visibility and communication.
This case represents a significant escalation in Brazil's approach to digital platform governance, particularly concerning minor protection. While TikTok awaits formal notice of the proceedings, Kwai has emphasized its commitment to user safety, especially regarding minors. The lawsuit's focus on algorithm modifications and data processing for users under 18 reflects growing global concerns about social media's impact on youth mental health and privacy, pushing platforms toward more rigorous protection standards similar to those in developed nations.
Meta Partners with Reuters for AI Chatbot News Integration in Landmark Content Deal
Meta Platforms has announced a strategic partnership with Reuters to power its AI chatbot's real-time news capabilities, marking the tech giant's first significant news deal in recent years. The multi-year agreement will enable Meta's AI to provide users with news summaries and direct links to Reuters content, representing a notable shift in Meta's approach to news content integration after previously scaling back news features across its platforms due to regulatory pressures and revenue-sharing disputes.
The partnership joins a growing trend of AI companies forming alliances with established news organizations, following similar moves by OpenAI and Perplexity. While financial terms remain undisclosed, Reuters will receive compensation for its journalistic content, building upon an existing fact-checking partnership established in 2020 between the two organizations. This collaboration aims to enhance the accuracy and reliability of news-related responses in Meta's AI chatbot.
The development signals a significant evolution in the relationship between AI platforms and traditional news media, potentially setting new precedents for content licensing and AI-powered news distribution. This partnership expands beyond Meta's previous fact-checking arrangement with Reuters, suggesting a more comprehensive approach to integrating professional journalism with AI technology, while addressing ongoing concerns about misinformation and content monetization in the digital age.
AI-Generated Child Abuse Images Lead to Landmark 18-Year Prison Sentence in UK
In a groundbreaking legal case, Hugh Nelson, a 27-year-old Bolton resident, has been sentenced to 18 years in prison for using artificial intelligence to create and distribute child sexual abuse imagery. Nelson exploited the Daz 3D application to transform innocent photographs of children into sexualized 3D content, operating a commissioning service where clients provided images of children they knew personally. The offender generated approximately £5,000 through the sale of these AI-manipulated images on online forums over an 18-month period.
Nelson's criminal enterprise was uncovered during an undercover police operation when he disclosed charging £80 per character creation using supplied photographs. His conviction encompasses multiple serious offenses, including encouraging the rape of a child under 13, attempting to incite a boy under 16 to engage in sexual acts, and various charges related to the distribution and possession of prohibited images. This case represents one of the first major convictions involving AI-generated child abuse imagery in the UK, setting a significant legal precedent.
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Anita
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2moThat $525M lawsuit definitely sends a strong message on youth safety, and it will be a real test of how committed tech giants are to protecting minors. As for the UK’s 18-year sentence for AI-enabled exploitation, it does seem like a clear signal that misuse of AI for harm won’t be tolerated. But I wonder: do we need consistently tough punishments across the board to enforce fundamental digital rights and ethics, or should penalties vary by case? I don’t know…. For me it’s a balancing act between being firm enough to deter, but also fair to the nuances and not overly restrictive to stifle the development. What do you think?