ONS Edition 30

Article: U.S. House Delivers Sweeping AI Report: 10 Biggest Takeaways for Employers. (Fisher Phillips, 19th December 2024)

Article Summary: A report detailing important obstacles and potential for AI adoption across all sectors was released by the U.S. House Bipartisan AI Task Force. The research stresses the need to assess present processes, find ways to incorporate AI, and train employees to fill new jobs made possible by AI. Additionally, it stresses how important it is for companies to implement "privacy-by-design" policies to protect private consumer and employee data. Additionally, the report stresses the importance of corporations establishing internal training programs to increase AI literacy and STEM abilities, as well as forming partnerships with educational institutions, to close the talent gap. Moreover, it stresses the significance of using AI risk management frameworks like the NIST AI Risk Management Framework to lessen the impact of these dangers. Employers should be ready for the arrival of sector-specific rules and the subsequent changes to compliance requirements. Decisions that affect employees or customers should be made in an open and transparent manner by AI systems. As disclosures will soon be required by state law, it is imperative that businesses establish rules outlining the function of AI in decision-making. To help small firms overcome these obstacles and reap the benefits of AI, the Task Force suggests providing them with specialized assistance. They ought to look at government initiatives and collaborations that aim to facilitate the AI adoption by small businesses and put their money into scalable AI solutions that suit their unique requirements. Regular bias audits of AI tools and human control of decision-making procedures involving substantial employee effect are two ways in which businesses might combat AI bias in decision-making. They should also provide staff with information regarding the dangers of synthetic content and establish regulations to deal with the appropriate and inappropriate use of AI-generated material. To sum up, the study from the U.S. House AI Task Force should be a wake-up call to companies, stressing the importance of adopting AI with care and strategy.

Article: Five New State Privacy Laws Effective January 2025. (Kilpatrick, 17th December 2024)

Article Summary: The nationwide implementation of five state privacy laws is scheduled to commence on January 1, 2025. For entities that meet certain requirements, the laws of Delaware, Iowa, Nebraska, and New Hampshire will apply to their business dealings with or targeting of citizens of Delaware. The maximum fine for one infraction is $10,000 and increases to $20,000 for each successive infraction. Compulsory privacy laws in Minnesota and Maryland will create new compliance obligations later in 2025, which will cause some of the biggest changes to the privacy landscape. Both the New York statute addressing adolescent and children's online safety and the revised Colorado statute pertaining to biometrics and children's data will take effect. New privacy and artificial intelligence rules are anticipated to be finalized by California's authorities in 2019. Consumers now have the option to not have their personal information used for things like targeted advertising, selling their data, and legally significant profiling. This is in line with existing privacy rules. While opt-in agreement is often required for processing sensitive data in most jurisdictions, it is permissible to opt-out in Iowa and Utah. Companies must keep privacy notifications up to date, enter contracts with third-party processors, reduce data consumption, adopt strong security measures, and refrain from penalizing customers for exercising their rights. Data sales, targeted advertising, profiling, and sensitive data processing are all considered high- risk activities that require data protection assessments like GDPR in most states with comprehensive privacy legislation. Companies should review their operations to see if these regulations are applicable, and if so, they should revise their privacy disclosures and consumer rights management procedures to ensure compliance.

Article: Horizon - ESG Regulatory News and Trends - December 2024. (DLA Piper, 18th December 2024)

Article Summary: In their monthly ESG business legal newsletter, DLA Piper identifies ten long-term themes and events that will impact company plans in 2025. When Donald Trump takes office again as US president, he has pledged to reduce environmental laws, do away with the Inflation Reduction Act, and put an emphasis on fossil fuels, so the US presidential election is sure to play a big role. It is anticipated that the United States would withdraw from the Paris Agreement, and the SEC Climate Rule may be vacated. Nevertheless, experts anticipate that the incoming administration would impede the shift to renewable energy sources and reverse efforts to promote diversity and inclusion. The states will play an increasingly important role after 2025, with Washington, California, Illinois, and New York being the most important states after that. Companies headquartered in the United States nevertheless have global obligations to adhere to ESG rules, such as those requiring sustainability disclosures. With revised Paris consensus pledges anticipated in February 2025, COP assumptions imply that multilateral consensus will continue to elude. While some progress was made in other forums, no definitive agreements were reached. Another historic climate case at The Hague is awaiting the ICJ's advisory opinion on states' responsibilities regarding climate change, therefore the court is keeping a careful eye on it. Companies around the world are increasingly being compelled to report on environmental, social, and governance (ESG) issues. Businesses with annual revenues of $1 billion or more are required under California Senate Bill 253 to begin reporting their GHG emissions in 2026. Nevertheless, businesses who make a "good faith effort" to comply will not face enforcement of the regulations in the first reporting year, according to the California Air Resources Board (CARB). On January 1, 2025, the climate-related financial disclosure regime in Australia will take effect, and because of changes to the Canada Business Corporations Act, big private companies with a federal incorporation will be required to disclose climate-related information in Canada. By 2025, all businesses in Mexico will be obligated to incorporate sustainability data into the notes section of their financial statements if they use the Mexican Financial Reporting Standards. Several European nations have made the EU CSRD a part of their own legal system. These nations include Austria, Belgium, Bulgaria, Croatia, Denmark, Finland, France, Hungary, Ireland, Italy, Lithuania, Romania, Spain, and Sweden. Proposed changes to Switzerland's Code of Obligations would raise the number of reporting firms from 300 to approximately 3,500 and bring Swiss regulations in line with worldwide systems, particularly the EU's CSRD. In the face of rising losses caused by natural disasters, which impact the prices of property and agricultural insurance, businesses and insurers are collaborating to tailor risk financing to individual needs. Loss prevention, risk mitigation, and tailored risk finance solutions are ways businesses are tackling these expenses. In addition, they will work together with insurance companies to encourage public-private partnerships that prioritize adaptation and resilience. Typical arguments of securities law infractions will result in ongoing enforcement actions and private lawsuits against financial services organizations. As an example, the SEC's Climate Disclosure Rules and the DOL Fiduciary Rule are two examples of environmental, social, and governance (ESG) programs pertaining to financial services that might be reversed by the new administration. Financial services companies will still face legal action and enforcement actions if they make important false statements or omit important facts about environmental, social, and governance (ESG) issues. When it comes to environmental, social, and governance (ESG) rules, states will keep filling the void, with some even following the federal government's example. As governments look more closely at how businesses treat people and the environment at every stage of the value chain, supply chain integrity is becoming more and more crucial. The Supply Chains Act in Canada, the EU Regulation on Deforestation-Free Products, and the EU Regulation on Forced Labor are the three legislation that are being watched very carefully. Extended producer responsibility (EPR) legislation in California, Oregon, and Colorado will implement in 2025, causing major changes to the plastic packaging sector. To hold producers accountable for waste cost management, these regulations mandate that they contribute to disposal initiatives via a non-profit PRO. At different stages in 2024, producers will be required to join these groups. As soon as these regulations take effect in their entirety, manufacturers will be required to record the number of covered materials, contribute to communal funds, and help with source reduction initiatives. January 1, 2025, is the deadline for regulators in California to establish final regulations for the state's EPR law's implementation, while May 22, 2025, is the deadline for regulators in Minnesota to adopt rules for the implementation of specified rates of reduction, reuse, recycling, and composting. No producer may sell protected material after July 1, 2025, unless they are complying, and the deadline in Oregon is March 31, 2025. The plaintiffs' bar has taken a hard line in its attempts to link producer recycling campaigns—including recyclability claims like the ever-present "chasing arrows"—to plastic pollution. Some states are following suit with legislation that prohibits making claims about a product's or its package's recyclability unless a state agency has determined that the product or its packaging can be recycled adequately inside the state. One such law is California's Senate Bill 343. As states work to formulate plastics programs, the EPA's National Strategy to Prevent Plastic Pollution offers industry insight and state-specific recommendations.

Article: Aggressive Enforcement Is Unlikely to Vanish Under Trump’s Top Antitrust Officials. (Skadden, Arps, Slate, Meagher & Flom LLP, 17th December 2024)

Article Summary: Mark Meador has been nominated to fill the fifth position on the Federal Trade Commission (FTC), while Andrew Ferguson has been named chair by President-elect Donald Trump. His stated desire to regulate "big tech" and his commitment to put an end to Big Tech's anti-competition and anti-free expression stances are noteworthy. Formerly an antitrust counsel for Senator Mike Lee, Ferguson has experience in the Federal Trade Commission, private practice, and the United States Senate. Meador has also called for the resuscitation of the Robinson-Patman Act (RPA) and other unconventional enforcement strategies that antitrust regulators have not employed much. Commissioner Melissa Holyoak has been opposed to the FTC's expansive regulatory strategy under Khan; her appointment to the position by Meador will swing the partisan balance of the FTC in favor of the Republicans. The reliance on historical case law in the 2023 Merger Guidelines is something she has voiced her worries about. Soon, Gail Slater will succeed Jonathan Kanter as director of the Antitrust Division of the Department of Justice. Who knows what these nominations could do, but it's still up in the air whether Trump’s picks will undo the most daring antitrust policies enacted by the Biden administration, such the 2023 Merger Guidelines. It is believed that Trump's authorities will be more accommodating to solutions, and that merger reviews will adhere to established standards that prioritize consumer welfare. Nonetheless, rigorous regulation of major internet corporations is likely to continue under Trump's second term, and he is anticipated to adopt a more forceful antitrust posture than prior Republican presidents.