Competition regulation

Bitcoin drops to 2024 low as AI fears and geopolitics rattle markets

A cautious mood spread across global markets as US stocks declined and Bitcoin slid to its lowest level since late 2024. Technology and software shares led losses, pushing major indices to their weakest performance in two weeks.

Bitcoin fell sharply before stabilising, remaining well below its October peak despite continued pro-crypto messaging from Washington. Gold and silver moved higher during the session, reinforcing their appeal as defensive assets amid rising uncertainty.

Investor sentiment weakened after Anthropic unveiled new legal-focused features for its Claude chatbot, reviving fears of disruption across software and data-driven business models. Analysts at Morgan Stanley pointed to rotation within the technology sector, with investors reducing exposure to software stocks.

Geopolitical tensions intensified after reports of US military action involving Iran, pushing oil prices higher and increasing market volatility. Combined AI uncertainty, geopolitical risk, and shifting safe-haven flows continue to weigh on equities and digital assets alike.

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India pushes Meta to justify WhatsApp’s data-sharing

The Supreme Court of India has delivered a forceful warning to Meta after judges said the company could not play with the right to privacy.

The court questioned how WhatsApp monetises personal data in a country where the app has become the de facto communications tool for hundreds of millions of people. Judges added that meaningful consent is difficult when users have little practical choice.

Meta was told not to share any user information while the appeal over WhatsApp’s 2021 privacy policy continues. Judges pressed the company to explain the value of behavioural data instead of relying solely on claims about encrypted messages.

Government lawyers argued that personal data was collected and commercially exploited in ways most users would struggle to understand.

The case stems from a major update to WhatsApp’s data-sharing rules that India’s competition regulator said abused the platform’s dominant position.

A significant penalty was issued before Meta and WhatsApp challenged the ruling at the Supreme Court. The court has now widened the proceedings by adding the IT ministry and has asked Meta to provide detailed answers before the next hearing on 9 February.

WhatsApp is also under heightened scrutiny worldwide as regulators examine how encrypted platforms analyse metadata and other signals.

In India, broader regulatory changes, such as new SIM-binding rules, could restrict how small businesses use the service rather than broadening its commercial reach.

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Ofcom expands scrutiny of X over Grok deepfake concerns

The British regulator, Ofcom, has released an update on its investigation into X after reports that the Grok chatbot had generated sexual deepfakes of real people, including minors.

As such, the regulator initiated a formal inquiry to assess whether X took adequate steps to manage the spread of such material and to remove it swiftly.

X has since introduced measures to limit the distribution of manipulated images, while the ICO and regulators abroad have opened parallel investigations.

The Online Safety Act does not cover all chatbot services, as regulation depends on whether a system enables user interactions, provides search functionality, or produces pornographic material.

Many AI chatbots fall partly or entirely outside the Act’s scope, limiting regulators’ ability to act when harmful content is created during one-to-one interactions.

Ofcom cannot currently investigate the standalone Grok service for producing illegal images because the Act does not cover that form of generation.

Evidence-gathering from X continues, with legally binding information requests issued to the company. Ofcom will offer X a full opportunity to present representations before any provisional findings are published.

Enforcement actions take several months, since regulators must follow strict procedural safeguards to ensure decisions are robust and defensible.

Ofcom added that people who encounter harmful or illegal content online are encouraged to report it directly to the relevant platforms. Incidents involving intimate images can be reported to dedicated services for adults or support schemes for minors.

Material that may constitute child sexual abuse should be reported to the Internet Watch Foundation.

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EU AI Act guidance delay raises compliance uncertainty

The European Commission has missed a key deadline to issue guidance on how companies should classify high-risk AI systems under the EU AI Act, fuelling uncertainty around the landmark law’s implementation.

Guidance on Article 6, which defines high-risk AI systems and stricter compliance rules, was due by early February. Officials have indicated that feedback is still being integrated, with a revised draft expected later this month and final adoption potentially slipping to spring.

The delay follows warnings that regulators and businesses are unprepared for the act’s most complex rules, due to apply from August. Brussels has suggested delaying high-risk obligations under its Digital Omnibus package, citing unfinished standards and the need for legal clarity.

Industry groups want enforcement delayed until guidance and standards are finalised, while some lawmakers warn repeated slippage could undermine confidence in the AI Act. Critics warn further changes could deepen uncertainty if proposed revisions fail or disrupt existing timelines.

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EU moves closer to decision on ChatGPT oversight

The European Commission plans to decide by early 2026 whether OpenAI’s ChatGPT should be classified as a vast online platform under the Digital Services Act.

OpenAI’s tool reported 120.4 million average monthly users in the EU back in October, a figure far above the 45-million threshold that triggers more onerous obligations instead of lighter oversight.

Officials said the designation procedure depends on both quantitative and qualitative assessments of how a service operates, together with input from national authorities.

The Commission is examining whether a standalone AI chatbot can fall within the scope of rules usually applied to platforms such as social networks, online marketplaces and significant search engines.

ChatGPT’s user data largely stems from its integrated online search feature, which prompts users to allow the chatbot to search the web. The Commission noted that OpenAI could voluntarily meet the DSA’s risk-reduction obligations while the formal assessment continues.

The EU’s latest wave of designations included Meta’s WhatsApp, though the rules applied only to public channels, not private messaging.

A decision on ChatGPT that will clarify how far the bloc intends to extend its most stringent online governance framework to emerging AI systems.

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AI legal tool rattles European data stocks

European data and legal software stocks fell sharply after US AI startup Anthropic launched a new tool for corporate legal teams. The company said the software can automate contract reviews, compliance workflows, and document triage, while clarifying that it does not offer legal advice.

Investors reacted swiftly, sending shares in Pearson, RELX, Sage, Wolters Kluwer, London Stock Exchange Group, and Experian sharply lower. Thomson Reuters also suffered a steep decline, reflecting concern that AI tools could erode demand for traditional data-driven services.

Market commentators warned that broader adoption of AI in professional services could compress margins or bypass established providers altogether. Morgan Stanley flagged intensifying competition, while AJ Bell pointed to rising investor anxiety across the sector.

The sell-off also revived debate over AI’s impact on employment, particularly in legal and other office-based roles. Recent studies suggest the UK may face greater disruption than other large economies as companies adopt AI tools, even as productivity gains continue to rise.

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Innovation and security shape the UAE’s tech strategy

The United Arab Emirates is strengthening its global tech role by treating advanced innovation as a pillar of sovereignty rather than a standalone growth driver. National strategy increasingly links technology with long-term economic resilience, security, and geopolitical relevance.

A key milestone was the launch of the UAE Advanced Technology Centre with the Technology Innovation Institute and the World Economic Forum, announced alongside the Davos gathering.

The initiative highlights the UAE’s transition from technology consumer to active participant in shaping global governance frameworks for emerging technologies.

The centre focuses on policy and governance for areas including artificial intelligence, quantum computing, biotechnology, robotics, and space-based payment systems.

Backed by a flexible regulatory environment, the UAE is promoting regulatory experimentation and translating research into real-world applications through institutions such as the Mohamed bin Zayed University of Artificial Intelligence and innovation hubs like Masdar City.

Alongside innovation, authorities are addressing rising digital risks, particularly deepfake technologies that threaten financial systems, public trust, and national security.

By combining governance, ethical standards, and international cooperation, the UAE is advancing a model of digital sovereignty that prioritises security, shared benefits, and long-term strategic independence.

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Chinese AI firms offer cash rewards to boost chatbot adoption

Technology firms in China are rolling out large cash incentive campaigns to attract users to their AI chatbots ahead of the expected launch of new AI models later this month.

Alibaba Group has earmarked CNY 3 billion for users of its Qwen AI app, with the promotion beginning on 6 February to coincide with Lunar New Year celebrations.

Tencent Holdings and Baidu have announced similar offers, together committing around CNY 1.5 billion in cash rewards and consumer electronics, including smartphones and televisions.

To qualify for prizes, users must register on the platforms and interact with the chatbots during the promotional period by asking questions or completing everyday planning tasks.

The incentives reflect intensifying competition with global developers such as Google and OpenAI, while also strengthening efforts to position China-based firms as potential local AI partners for Apple in the Chinese market.

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Europe warns over reliance on foreign digital technologies

European policymakers are sharpening their focus on digital sovereignty as concerns grow over the continent’s reliance on foreign technology providers. Control over key digital infrastructure and technologies is seen as vital to protecting Europe’s economic resilience.

At a fintech regulatory conference in Brussels, European Financial Services Commissioner Maria Luís Albuquerque stressed the need to retain control over core economic technologies. She warned that rising global isolationism is heightening the risks linked to external dependencies.

The comments reflected unease about Europe’s reliance on non-European tech companies, particularly those based in the United States. Such dependence, officials argue, could weaken Europe’s ability to protect its digital infrastructure and shape its own economic future.

Calls for greater digital autonomy are gaining momentum as the EU seeks to balance innovation with security. Policymakers see technological control as key to long-term stability, competitiveness, and strategic independence.

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Australia steps up platform scrutiny after mass Snapchat removals

Snapchat has blocked more than 415,000 Australian accounts after the national ban on under-16s began, marking a rapid escalation in the country’s effort to restrict children’s access to major platforms.

The company relied on a mix of self-reported ages and age-detection technologies to identify users who appeared to be under 16.

The platform warned that age verification still faces serious shortcomings, leaving room for teenagers to bypass safeguards rather than supporting reliable compliance.

Facial estimation tools remain accurate only within a narrow range, meaning some young people may slip through while older users risk losing access. Snapchat also noted the likelihood that teenagers will shift towards less regulated messaging apps.

The eSafety commissioner has focused regulatory pressure on the 10 largest platforms, although all services with Australian users are expected to assess whether they fall under the new requirements.

Officials have acknowledged that the technology needs improvement and that reliability issues, such as the absence of a liveness check, contributed to false results.

More than 4.7 million accounts have been deactivated across the major platforms since the ban began, although the figure includes inactive and duplicate accounts.

Authorities in Australia expect further enforcement, with notices set to be issued to companies that fail to meet the new standards.

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