Competition regulation

The UK labour market feels a sharper impact from AI use

Companies are reporting net job losses linked to AI adoption, with research showing a sharper impact than in other major economies. A Morgan Stanley survey found that firms using the technology for at least a year cut more roles than they created, particularly across the UK labour market.

The study covered sectors including retail, real estate, transport, healthcare equipment and automotive manufacturing, showing an average productivity increase of 11.5% among UK businesses. Comparable firms in the United States reported similar efficiency gains but continued to expand employment overall.

Researchers pointed to higher operating costs and tax pressures as factors amplifying the employment impact in Britain. Unemployment has reached a four-year high, while increases in the minimum wage and employer national insurance contributions have tightened hiring across industries.

Public concern over AI-driven displacement is also rising, with more than a quarter of UK workers fearing their roles could disappear within five years, according to recruitment firm Randstad. Younger workers expressed the highest anxiety, while older generations showed greater confidence in adapting.

Political leaders warn that unmanaged AI-driven change could disrupt labour markets. London mayor Sadiq Khan said the technology may cut many white-collar jobs, calling for action to create replacement roles.

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EU classifies WhatsApp as Very Large Online Platform

WhatsApp has been formally designated a Very Large Online Platform under the EU Digital Services Act, triggering the bloc’s most stringent digital oversight regime.

The classification follows confirmation that the messaging service has exceeded 51 million monthly users in the EU, triggering enhanced regulatory scrutiny.

As a VLOP, WhatsApp must take active steps to limit the spread of disinformation and reduce risks linked to the manipulation of public debate. The platform is also expected to strengthen safeguards for users’ mental health, with particular attention placed on the protection of minors and younger audiences.

The European Commission will oversee compliance directly and may impose financial penalties of up to 6 percent of WhatsApp’s global annual turnover if violations are identified. The company has until mid-May to align its systems, policies and risk assessments with the DSA’s requirements.

WhatsApp joins a growing list of major platforms already subject to similar obligations, including Facebook, Instagram, YouTube and X. The move reflects the Commission’s broader effort to apply the Digital Services Act across social media, messaging services and content platforms linked to systemic online risks.

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France proposes EU tools to map foreign tech dependence

France has unveiled a new push to reduce Europe’s dependence on US and Chinese technology suppliers, placing digital sovereignty back at the centre of the EU policy debates.

Speaking in Paris, France’s minister for AI and digital affairs, Anne Le Hénanff, presented initiatives to expose and address the structural reliance on non-EU technologies across public administrations and private companies.

Central to the strategy is the creation of a Digital Sovereignty Observatory, which will map foreign technology dependencies and assess organisational exposure to geopolitical and supply-chain risks.

The body, led by former Europe minister Clément Beaune, is intended to provide the evidence base needed for coordinated action rather than symbolic declarations of autonomy.

France is also advancing a Digital Resilience Index, expected to publish its first findings in early 2026. The index will measure reliance on foreign digital services and products, identifying vulnerabilities linked to cloud infrastructure, AI, cybersecurity and emerging technologies.

Industry data suggests Europe’s dependence on external tech providers costs the continent hundreds of billions of euros annually.

Paris is using the initiative to renew calls for a European preference in public-sector digital procurement and for a standard EU definition of European digital services.

Such proposals remain contentious among member states, yet France argues they are essential for restoring strategic control over critical digital infrastructure.

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UK banks block large share of crypto transfers, report finds

UK banks are blocking or delaying close to 40% of payments to cryptocurrency exchanges, sharply increasing customer friction and slowing market growth, according to a new industry report.

Around 80% of surveyed exchanges reported rising payment disruptions, while 70% described the banking environment as increasingly hostile, discouraging investment, hiring, and product launches in the UK.

The survey of major platforms, including Coinbase, Kraken, and Gemini, reveals widespread and opaque restrictions across bank transfers and card payments. One exchange reported nearly £1 billion in declined transactions last year, citing unclear rejection reasons despite FCA registration.

Several high-street and digital banks maintain outright blocks, while others impose strict transaction caps. The UK Cryptoasset Business Council warned that blanket debanking practices could breach existing regulations, including those on payment services, consumer protection, and competition.

The council urged the FCA and government to enforce a risk-based approach, expand data sharing, and remove unnecessary barriers as the UK finalises its long-term crypto framework.

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Europe rethinks dependence on US Big Tech

Rising transatlantic tensions have reignited concerns over Europe’s heavy reliance on US Big Tech, exposing vulnerabilities across cloud services, AI, and digital infrastructure.

European lawmakers are increasingly pushing for homegrown alternatives, warning that excessive dependence on a small group of foreign providers threatens economic resilience, public services, and technological sovereignty.

European Parliament data shows over 80 percent of the EU’s digital products and infrastructure come from outside the bloc, with US firms dominating cloud and AI.

Officials warn the concentration increases geopolitical, cyber and supply risks, driving renewed efforts to boost Europe’s digital autonomy and competitiveness.

Initiatives such as Eurostack and rising open-source investment aim to build digital independence, though analysts say real sovereignty could take a decade and vast funding.

While policymakers accept that full decoupling from US technology remains unrealistic, pressure is mounting for governments and public institutions to prioritise European solutions and treat digital infrastructure as a strategic asset.

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Rapid AI growth tests regulation in the Gulf

Gulf states are accelerating AI investment to drive diversification, while regulators struggle to keep pace with rapid technological change. Saudi Arabia, the UAE, and Qatar are deploying AI across key sectors while pursuing regional leadership in digital innovation.

Despite political commitment and large-scale funding, policymakers struggle to balance innovation with risk management. AI’s rapid pace and global reach strain governance, while foreign tech reliance raises sovereignty and security risks.

Corporate influence, intensifying geopolitical competition, and the urgent race to attract foreign capital further complicate oversight efforts, constraining regulators’ ability to impose robust and forward-looking governance frameworks.

With AI increasingly viewed as a source of economic and strategic power, Gulf governments face a narrowing window to establish effective regulatory frameworks before the technology becomes deeply embedded across critical infrastructure.

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Apple accuses the EU of blocking App Store compliance changes

Apple has accused the European Commission of preventing it from implementing App Store changes designed to comply with the Digital Markets Act, following a €500 million fine for breaching the regulation.

The company claims it submitted a formal compliance plan in October and has yet to receive a response from EU officials.

In a statement, Apple argued that the Commission requested delays while gathering market feedback, a process the company says lasted several months and lacked a clear legal basis.

The US tech giant described the enforcement approach as politically motivated and excessively burdensome, accusing the EU of unfairly targeting an American firm.

The Commission has rejected those claims, saying discussions with Apple remain ongoing and emphasising that any compliance measures must support genuinely viable alternative app stores.

Officials pointed to the emergence of multiple competing marketplaces after the DMA entered into force as evidence of market demand.

Scrutiny has increased following the decision by SetApp mobile to shut down its iOS app store in February, with the developer citing complex and evolving business terms.

Questions remain over whether Apple’s proposed shift towards commission-based fees and expanded developer communication rights will satisfy EU regulators.

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Writers challenge troubling AI assumptions about language and style

A growing unease among writers is emerging as AI tools reshape how language is produced and perceived. Long-established habits, including the use of em dashes and semicolons, are increasingly being viewed with suspicion as machine-generated text becomes more common.

The concern is not opposition to AI itself, but the blurring of boundaries between human expression and automated output. Writers whose work was used to train large language models without consent say stylistic traits developed over decades are now being misread as algorithmic authorship.

Academic and editorial norms are also shifting under this pressure. Teaching practices that once valued rhythm, voice, and individual cadence are increasingly challenged by stricter stylistic rules, sometimes framed as safeguards against sloppy or machine-like writing rather than as matters of taste or craft.

At the same time, productivity tools embedded into mainstream software continue to intervene in the writing process, offering substitutions and revisions that prioritise clarity and efficiency over nuance. Such interventions risk flattening language and discouraging the idiosyncrasies that define human authorship.

As AI becomes embedded in publishing, education, and professional writing, the debate is shifting from detection to preservation. Many writers warn that protecting human voice and stylistic diversity is essential, arguing that affectless, uniform prose would erode creativity and trust.

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WEF paper warns of widening AI investment gap

Policy-makers are being urged to take a more targeted approach to ‘sovereign AI’ spending, as a new paper released alongside the World Economic Forum meeting in Davos argues that no country can realistically build every part of the AI stack alone. Instead, the authors recommend treating AI sovereignty as ‘strategic interdependence’, combining selective domestic investment with trusted partnerships and alliances.

The paper, co-authored by the World Economic Forum and Bain & Co, highlights how heavily the United States and China dominate the global AI landscape. It estimates that the two countries capture around 65% of worldwide investment across the AI value chain, reflecting a full-stack model, from chips and cloud infrastructure to applications, that most other economies cannot match at the same scale.

For smaller and mid-sized economies, that imbalance can translate into a competitive disadvantage, because AI infrastructure, such as data centres and computing capacity, is increasingly viewed as the backbone of national AI capability. Still, the report argues that faster-moving countries can carve out a niche by focusing on a few priority areas, pooling regional capacity, or securing access through partnerships rather than trying to replicate the US-China approach.

The message was echoed in Davos by Nvidia chief executive Jensen Huang, who said every country should treat AI as essential infrastructure, comparable to electricity grids and transport networks. He argued that building AI data centres could drive demand for well-paid skilled trades, from electricians and plumbers to network engineers, framing the boom as a major job creator rather than a trigger for widespread job losses.

At the same time, the paper warns that physical constraints could slow expansion, including the availability of land, energy and water, as well as shortages of highly skilled workers. It also notes that local regulation can delay projects, although some industry groups argue that regulatory and cost pressures may push countries to innovate sooner in efficiency and greener data-centre design.

In the UK, industry body UKAI says high energy prices, limited grid capacity, complex planning rules and public scrutiny already create the same hurdles many other countries may soon face. It argues these constraints are helping drive improvements in efficiency, system design and coordination, seen as building blocks for more sustainable AI infrastructure.

Diplo is live reporting on all sessions from the World Economic Forum 2026 in Davos.

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AI Act strengthens training rules despite 2025 Digital Omnibus reforms

The European AI Regulation reinforces training and awareness as core compliance requirements, even as the EU considers simplifications through the proposed Digital Omnibus. Regulation (EU) 2024/1689 sets a risk-based framework for AI systems under the AI Act.

AI literacy is promoted through a multi-level approach. The EU institutions focus on public awareness, national authorities support voluntary codes of conduct, and organisations are currently required under the AI Act to ensure adequate AI competence among staff and third parties involved in system use.

A proposed amendment to Article 4, submitted in November 2025 under the Digital Omnibus, would replace mandatory internal competence requirements with encouragement-based measures. The change seeks to reduce administrative burden without removing AI Act risk management duties.

Even if adopted, the amendment would not eliminate the practical need for AI training. Competence in AI systems remains essential for governance, transparency, monitoring, and incident handling, particularly for high-risk use cases regulated by the AI Act.

Companies are therefore expected to continue investing in tailored AI training across management, technical, legal, and operational roles. Embedding awareness and competence into risk management frameworks remains critical to compliance and risk mitigation.

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