Competition regulation

Character.AI and Google face suits over child safety claims

Three lawsuits have been filed in US federal courts alleging that Character.AI and its founders, with Google’s backing, deployed predatory chatbots that harmed children. The cases involve the family of 13-year-old Juliana Peralta, who died by suicide in 2023, and two other minors.

The complaints say the chatbots were designed to mimic humans, build dependency, and expose children to sexual content. Using emojis, typos, and pop-culture personas, the bots allegedly gained trust and encouraged isolation from family and friends.

Juliana’s parents say she engaged in explicit chats, disclosed suicidal thoughts, and received no intervention before her death. Nina, 15, from New York, attempted suicide after her mother blocked the app, while a Colorado, US girl known as T.S. was also affected.

Character.AI and Google are accused of misrepresenting the app as child-safe and failing to act on warning signs. The cases follow earlier lawsuits from the Social Media Victims Law Center over similar claims that the platform encouraged harm.

SMVLC founder Matthew Bergman stated that the cases underscore the urgent need for accountability in AI design and stronger safeguards to protect children. The legal team is seeking damages and stricter safety standards for chatbot platforms marketed to minors.

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WTO report notes AI’s potential benefit to trade if divides are addressed

The WTO launched the 2025 World Trade Report, titled ‘Making trade and AI work together to benefit all’. The report argues that AI could potentially boost global trade by up to 37% and GDP by 12–13% by 2040, particularly through digitally deliverable services.

It notes that AI can lower trade costs, improve supply-chain efficiency, and create opportunities for small firms and developing countries. Still, it warns that without deliberate action, AI could deepen global inequalities and widen the gap between advanced and developing economies.

The report underscores the need for investment in digital infrastructure, energy, skills, and enabling policies, highlighting the importance of IP protection, competition frameworks, and government support.

A newly developed indicator, the WTO AI Trade Policy Openness Index (AI-TPOI), revealed significant variation in AI-related trade policies across and within income groups.

It assessed three policy areas relevant to AI diffusion: barriers to services trade, restrictions on trade in AI-enabling goods, and limitations on cross-border data flows.

Stronger multilateral cooperation and targeted capacity-building were presented as essential to ensure AI-enabled trade supports inclusive, sustainable prosperity rather than reinforcing existing divides.

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Meta and Google to block political ads in EU under new regulations

Broadcasters and advertisers seek clarity before the EU’s political advertising rules become fully applicable on 10 October. The European Commission has promised further guidance, but details on what qualifies as political advertising remain vague.

Meta and Google will block the EU’s political, election, and social issue ads when the rules take effect, citing operational challenges and legal uncertainty. The regulation, aimed at curbing disinformation and foreign interference, requires ads to display labels with sponsors, payments, and targeting.

Publishers fear they lack the technical means to comply or block non-compliant programmatic ads, risking legal exposure. They call for clear sponsor identification procedures, standardised declaration formats, and robust verification processes to ensure authenticity.

Advertisers warn that the rules’ broad definition of political actors may be hard to implement. At the same time, broadcasters fear issue-based campaigns – such as environmental awareness drives – could unintentionally fall under the scope of political advertising.

The Dutch parliamentary election on 29 October will be the first to take place under the fully applicable rules, making clarity from Brussels urgent for media and advertisers across the bloc.

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Amazon and Mercado Libre criticised for limiting seller mobility in Mexico

Mexico’s competition watchdog has accused Amazon and Mercado Libre of erecting barriers that limit the mobility of sellers in the country’s e-commerce market. The two platforms reportedly account for 85% of the seller market.

The Federal Economic Competition Commission (COFECE) stated that the companies provide preferential treatment to sellers who utilise their logistics services and fail to disclose how featured offers are selected, thereby restricting fair competition.

Despite finding evidence of these practices, COFECE stopped short of imposing corrective measures, citing a lack of consensus among stakeholders. Amazon welcomed the decision, saying it demonstrates the competitiveness of the retail market in Mexico.

The watchdog aims to promote a more dynamic e-commerce sector, benefiting buyers and sellers. Its February report had recommended measures to improve transparency, separate loyalty programme services, and allow fairer access to third-party delivery options.

Trade associations praised COFECE for avoiding sanctions, warning that penalties could harm consumers and shield traditional retailers. Mercado Libre has not yet commented on the findings.

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Gemini 2.5 solves top ICPC problems at world finals

Google CEO Sundar Pichai announced that its Gemini 2.5 Deep Think AI model achieved a ‘gold-medal performance’ at the 2025 ICPC World Finals. The ICPC World Finals is among the most prestigious university-level programming contests.

The model solved ten out of twelve problems, including one no human team could complete during the competition. The AI solved eight issues in the first 45 minutes and completed two more in the following three hours, demonstrating exceptional algorithmic reasoning and coding skills.

Gemini’s participation was conducted live and remotely under official ICPC rules, starting ten minutes after human teams, with the same five-hour limit.

Google explained that Gemini’s performance results from reinforcement learning, allowing the AI to reason, generate code, test solutions, and refine its approach based on feedback. Internal tests indicate Gemini 2.5 would have matched the top 20 human coders at past ICPC finals.

For general users, a lighter version of Gemini 2.5 Deep Think is available through the Gemini app for Google AI Ultra subscribers, offering access to advanced problem-solving capabilities in a more accessible format.

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EU AI Act enforcement gears up with 15 authorities named in Ireland

Ireland has designated 15 authorities to monitor compliance with the EU’s AI Act, making it one of the first EU countries fully ready to enforce the new rules. The AI Act regulates AI systems according to their risk to society and began phasing in last year.

Governments had until 2 August to notify the European Commission of their appointed market surveillance authorities. In Ireland, these include the Central Bank, Coimisiún na Meán, the Data Protection Commission, the Competition and Consumer Protection Commission, and the Health and Safety Authority.

The country will also establish a National AI Office as the central coordinator for AI Act enforcement and liaise with EU institutions. A single point of contact must be designated where multiple authorities are involved to ensure clear communication.

Ireland joins Cyprus, Latvia, Lithuania, Luxembourg, Slovenia, and Spain as countries that have appointed their contact points. The Commission has not yet published the complete list of authorities notified by member states.

Former Italian Prime Minister Mario Draghi has called for a pause in the rollout of the AI Act, citing risks and a lack of technical standards. The Commission has launched a consultation as part of its digital simplification package, which will be implemented in December.

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SEC approves new standards for digital asset trading

The Securities and Exchange Commission has approved new generic listing standards for exchange-traded products that hold spot commodities, including digital assets. Exchanges can now list and trade Commodity-Based Trust Shares without submitting a separate SEC rule change.

SEC Chairman Paul S. Atkins said the move aims to maintain America’s capital markets as a leading hub for digital asset innovation. The decision is expected to increase investor choice and streamline access to digital asset products.

Jamie Selway, Director of the Division of Trading and Markets, highlighted that the approval offers clear regulatory guidance and ensures investor protections while making it easier for products to reach the market.

Alongside the generic standards, the SEC approved the Grayscale Digital Large Cap Fund listing, which tracks the CoinDesk 5 Index of spot digital assets.

The regulator also authorised p.m.-settled options on the Cboe Bitcoin US ETF Index and the Mini-Cboe Bitcoin US ETF Index with multiple expiration formats.

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WEF urges trade policy shift to protect workers in digital economy

The World Economic Forum (WEF) has published an article on using trade policy to build a fairer digital economy. Digital services now make up over half of global exports, with AI investment projected at $252 billion in 2024. Countries from Kenya to the UAE are positioning as digital hubs, but job quality still lags.

Millions of platform workers face volatile pay, lack of contracts, and no access to social protections. In Kenya alone, 1.9 million people rely on digital work yet face algorithm-driven pay systems and sudden account deactivations. India and the Philippines show similar patterns.

AI threatens to automate lower-skilled tasks such as data annotation and moderation, deepening insecurity in sectors where many developing countries have found a competitive edge. Ethical standards exist but have little impact without enforcement or supportive regulation.

Countries are experimenting with reforms: Singapore now mandates injury compensation and retirement savings for platform workers, while the Rider Law in Spain reclassifies food couriers as employees. Yet overly strict regulation risks eroding the flexibility that attracts youth and caregivers to gig work.

Trade agreements, such as the AfCFTA and the Kenya–EU pact, could embed labour protections in digital markets. Coordinated policies and tripartite dialogue are essential to ensure the digital economy delivers growth, fairness, and dignity for workers.

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Hollywood studios take legal action against MiniMax for AI copyright infringement

Disney, Warner Bros. Discovery and NBCUniversal have filed a lawsuit in California against Chinese AI company MiniMax, accusing it of large-scale copyright infringement.

The studios allege that MiniMax’s Hailuo AI service generates unauthorised images and videos featuring well-known characters such as Darth Vader, marketing itself as a ‘Hollywood studio in your pocket’ instead of respecting copyright laws.

According to the complaint, MiniMax, reportedly worth $4 billion, ignored cease-and-desist requests and continues to profit from copyrighted works. The studios argue that the company could easily implement safeguards, pointing to existing controls that already block violent or explicit content.

MiniMax’s approach, as they claim, represents a serious threat to both creators and the broader film industry, which contributes hundreds of billions of dollars to the US economy.

Plaintiffs, including Disney’s Marvel and Lucasfilm units, Universal’s DreamWorks Animation and Warner Bros.’ DC Comics, are seeking statutory damages of up to $150,000 per infringed work or unspecified compensation.

They are also asking for an injunction to prevent MiniMax from continuing its alleged violations instead of simply paying damages.

The Motion Picture Association has backed the lawsuit, with its chairman Charles Rivkin warning that unchecked copyright infringement could undermine millions of jobs and the cultural value created by the American film industry.

MiniMax, based in Shanghai, has not responded publicly to the claims but has previously described itself as a global AI foundation model company with over 157 million users worldwide.

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Miljodata hack exposes data of nearly 15% of Swedish population

Swedish prosecutors have confirmed that a cyberattack on IT systems provider Miljodata exposed the personal data of 1.5 million people, nearly 15% of Sweden’s population. The attack occurred during the weekend of August 23–24.

Authorities said the stolen data has been leaked online and includes names, addresses, and contact details. Prosecutor Sandra Helgadottir said the group Datacarry has claimed responsibility, though no foreign state involvement is suspected.

Media in Sweden reported that the hackers demanded 1.5 bitcoin (around $170,000) to prevent the release of the data. Miljodata confirmed the information has now been published on the darknet.

The Swedish Authority for Privacy Protection has received over 250 breach notifications, with 164 municipalities and four regional authorities impacted. Employees in Gothenburg were among those affected, according to SVT.

Private companies, including Volvo, SAS, and GKN Aerospace, also reported compromised data. Investigators are working to identify the perpetrators as the breach’s scale continues to raise concerns nationwide.

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