Jurisdiction

EU AI Act oversight and fines begin this August

A new phase of the EU AI Act takes effect on 2 August, requiring member states to appoint oversight authorities and enforce penalties. While the legislation has been in force for a year, this marks the beginning of real scrutiny for AI providers across Europe.

Under the new provisions, countries must notify the European Commission of which market surveillance authorities will monitor compliance. But many are expected to miss the deadline. Experts warn that without well-resourced and competent regulators, the risks to rights and safety could grow.

The complexity is significant. Member states must align enforcement with other regulations, such as the GDPR and Digital Services Act, raising concerns regarding legal fragmentation and inconsistent application. Some fear a repeat of the patchy enforcement seen under data protection laws.

Companies that violate the EU AI Act could face fines of up to €35 million or 7% of global turnover. Smaller firms may face reduced penalties, but enforcement will vary by country.

Rules regarding general-purpose AI models such as ChatGPT, Gemini, and Grok also take effect. A voluntary Code of Practice introduced in July aims to guide compliance, but only some firms, such as Google and OpenAI, have agreed to sign. Meta has refused, arguing the rules stifle innovation.

Existing AI tools have until 2027 to comply fully, but any launched after 2 August must meet the new requirements immediately. With implementation now underway, the AI Act is shifting from legislation to enforcement.

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China demands Nvidia explain security flaws in H20 chips

China’s top internet regulator has summoned Nvidia to explain alleged security concerns linked to its H20 computing chips.

The Cyberspace Administration of China stated that the chips, which are sold domestically, may contain backdoor vulnerabilities that could pose risks to users and systems.

Instead of ignoring the issue, Nvidia has been asked to submit technical documents and provide a formal response addressing these potential flaws.

The chips are part of Nvidia’s tailored product line for the Chinese market following US export restrictions on advanced AI processors.

The investigation signals tighter scrutiny from Chinese authorities on foreign technology amid ongoing geopolitical tensions and a global race for semiconductor dominance.

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Apple’s $20B Google deal under threat as AI lags behind rivals

Apple is set to release Q3 earnings on Thursday amid scrutiny over its Google search deal dependencies and ongoing struggles with AI progress.

Typically, Apple’s fiscal Q3 garners less investor attention, with anticipation focused instead on the upcoming iPhone launch in Q4. However, this quarter is proving to be anything but ordinary.

Analysts and shareholders alike are increasingly concerned about two looming threats: a potential $20 billion hit to Apple’s Services revenue tied to the US Department of Justice’s (DOJ) antitrust case against Google, and ongoing delays in Apple’s AI efforts.

Ahead of the earnings report, Apple shares were mostly unchanged, reflecting investor caution rather than enthusiasm. Apple’s most pressing challenge stems from its lucrative partnership with Google.

In 2022, Google paid Apple approximately $20 billion to remain the default search engine in the Safari browser and across Siri.

The exclusivity deal has formed a significant portion of Apple’s Services segment, which generated $78.1 billion in revenue that year, making Google’s contribution alone account for more than 25% of that figure.

However, a ruling expected next month from Judge Amit Mehta in the US District Court for the District of Columbia could threaten the entire arrangement. Mehta previously found Google guilty of operating an illegal monopoly in the search market.

The forthcoming ‘remedies’ ruling could force Google to end exclusive search deals, divest its Chrome browser, and provide data access to rivals. Should the DOJ’s proposed remedies stand and Google fails to overturn the ruling, Apple could lose a critical source of Services revenue.

According to Morgan Stanley’s Erik Woodring, Apple could see a 12% decline in its full-year 2027 earnings per share (EPS) if it pivots to less lucrative partnerships with alternative search engines.

The user experience may also deteriorate if customers can no longer set Google as their default option. A more radical scenario, Apple launching its search engine, could dent its 2024 EPS by as much as 20%, though analysts believe this outcome is the least likely.

Alongside regulatory threats, Apple is also facing growing doubts about its ability to compete in AI. Apple has not yet set a clear timeline for releasing an upgraded version of Siri, while rivals accelerate AI hiring and unveil new capabilities.

Bank of America analyst Wamsi Mohan noted this week that persistent delays undermine confidence in Apple’s ability to deliver innovation at the pace. ‘Apple’s ability to drive future growth depends on delivering new capabilities and products on time,’ he wrote to investors.

‘If deadlines keep slipping, that potentially delays revenue opportunities and gives competitors a larger window to attract customers.’

While Apple has teased upcoming AI features for future software updates, the lack of a commercial rollout or product roadmap has made investors uneasy, particularly as rivals like Microsoft, Google, and OpenAI continue to set the AI agenda.

Although Apple’s stock remained stable before Thursday’s earnings release, any indication of slowing services growth or missed AI milestones could shake investor confidence.

Analysts will be watching closely for commentary from CEO Tim Cook on how Apple plans to navigate regulatory risks and revive momentum in emerging technologies.

The company’s current crossroads is pivotal for the tech sector more broadly. Regulators are intensifying scrutiny on platform dominance, and AI innovation is fast becoming the new battleground for long-term growth.

As Apple attempts to defend its business model and rekindle its innovation edge, Thursday’s earnings update could serve as a bellwether for its direction in the post-iPhone era.

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White House launches AI Action Plan with Executive Orders on exports and regulation

The White House has unveiled a sweeping AI strategy through its new publication Winning the Race: America’s AI Action Plan.

Released alongside three Executive Orders, the plan outlines the federal government’s next phase in shaping AI policy, focusing on innovation, infrastructure, and global leadership.

The AI Action Plan centres on three key pillars: accelerating AI development, establishing national AI infrastructure, and promoting American AI standards globally. Four consistent themes run through each pillar: regulation and deregulation, investment, research and standardisation, and cybersecurity.

Notably, deregulation is central to the plan’s strategy, particularly in reducing barriers to AI growth and speeding up infrastructure approval for data centres and grid expansion.

Investment plays a dominant role. Federal funds will support AI job training, data access, lab automation, and domestic component manufacturing, instead of relying on foreign suppliers.

Alongside, the plan calls for new national standards, improved dataset quality, and stronger evaluation mechanisms for AI interpretability, control, and safety. A dedicated AI Workforce Research Hub is also proposed.

In parallel, three Executive Orders were issued. One bans ‘woke’ or ideologically biased AI tools in federal use, another fast-tracks data centre development using federal land and brownfield sites, and a third launches an AI exports programme to support full-stack US AI systems globally.

While these moves open new opportunities, they also raise questions around regulation, bias, and the future shape of AI development in the US.

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NATO highlights cyber vulnerabilities in European ports

A recent policy brief from NATO’s Cooperative Cyber Defence Centre of Excellence (CCDCOE) indicates that Europe’s civilian ports, which handle approximately 80% of international trade and support NATO logistics, are increasingly targeted by cyberattacks linked to state-affiliated actors. The report identifies a rise in disruptions affecting port access control systems and vessel traffic management across various countries, with suspected involvement from groups associated with Russia, Iran, and China.

The document notes that NATO’s current maritime strategy lacks formal mechanisms to engage with commercial port operators, who manage critical infrastructure exposed to cyber threats. It calls for updated strategic frameworks to improve coordination between civil and military sectors, and to enhance cybersecurity and resilience across digital, operational, and energy systems in ports.

The brief outlines common attack methods, such as denial-of-service, phishing, ransomware, and malware, which have affected numerous maritime organisations in 2024.

Key recommendations include:

  • Updating NATO’s 2011 maritime strategy to integrate cybersecurity and establish engagement channels with commercial port operators.
  • Establishing sector-specific intelligence-sharing frameworks to support timely incident response.
  • Developing coordinated public–private action plans and resilience measures at both national and alliance levels.

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Google states it has not received UK request to weaken encryption

Google has confirmed it has not received a request from the UK government to create a backdoor in its encrypted services. The clarification comes amid ongoing scrutiny of surveillance legislation and its implications for tech companies offering end-to-end encrypted services.

Reports indicate that the UK government may be reconsidering an earlier request for Apple to enable access to user data through a technical backdoor, which is a move that prompted strong opposition from the US government. In response to these developments, US Senator Ron Wyden has sought to clarify whether similar requests were made to other major technology companies.

While Google initially declined to respond to inquiries from Senator Wyden’s office, the company had not received a technical capabilities notice—an official order under UK law that could require companies to enable access to encrypted data.

Senator Wyden, who serves on the Senate Intelligence Committee, addressed the matter in a letter to Director of National Intelligence Tulsi Gabbard. The letter urged the US intelligence community to assess the potential national security implications of the UK’s surveillance laws and any undisclosed requests to US companies.

Meta, which offers encrypted messaging through WhatsApp and Facebook Messenger, also stated in a 17 March communication to Wyden’s office that it had ‘not received an order to backdoor our encrypted services, like that reported about Apple.’

While companies operating in the UK may be restricted from disclosing certain surveillance orders under law, confirmations such as Google’s provide rare public insight into the current landscape of international encryption policy and cooperation.

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Italy investigates Meta over AI integration in WhatsApp

Italy’s antitrust watchdog has investigated Meta Platforms over allegations that the company may have abused its dominant position by integrating its AI assistant directly into WhatsApp.

The Rome-based authority, formally known as the Autorità Garante della Concorrenza e del Mercato (AGCM), announced the probe on Wednesday, stating that Meta may have breached European Union competition regulations.

The regulator claims that the introduction of the Meta AI assistant into WhatsApp was carried out without obtaining prior user consent, potentially distorting market competition.

Meta AI, the company’s virtual assistant designed to provide chatbot-style responses and other generative AI functions, has been embedded in WhatsApp since March 2025. It is accessible through the app’s search bar and is intended to offer users conversational AI services directly within the messaging interface.

The AGCM is concerned that this integration may unfairly favour Meta’s AI services by leveraging the company’s dominant position in the messaging market. It warned that such a move could steer users toward Meta’s products, limit consumer choice, and disadvantage competing AI providers.

‘By pairing Meta AI with WhatsApp, Meta appears to be able to steer its user base into the new market not through merit-based competition, but by ‘forcing’ users to accept the availability of two distinct services,’ the authority said.

It argued that this strategy may undermine rival offerings and entrench Meta’s position across adjacent digital services. In a statement, Meta confirmed cooperating fully with the Italian authorities.

The company defended the rollout of its AI features, stating that their inclusion in WhatsApp aimed to improve the user experience. ‘Offering free access to our AI features in WhatsApp gives millions of Italians the choice to use AI in a place they already know, trust and understand,’ a Meta spokesperson said via email.

The company maintains its approach, which benefits users by making advanced technology widely available through familiar platforms. The AGCM clarified that its inquiry is conducted in close cooperation with the European Commission’s relevant offices.

The cross-border collaboration reflects the growing scrutiny Meta faces from regulators across the EU over its market practices and the use of its extensive user base to promote new services.

If the authority finds Meta in breach of EU competition law, the company could face a fine of up to 10 percent of its global annual turnover. Under Article 102 of the Treaty on the Functioning of the European Union, abusing a dominant market position is prohibited, particularly if it affects trade between member states or restricts competition.

To gather evidence, AGCM officials inspected the premises of Meta’s Italian subsidiary, accompanied by Guardia di Finanza, the tax police’s special antitrust unit in Italy.

The inspections were part of preliminary investigative steps to assess the impact of Meta AI’s deployment within WhatsApp. Regulators fear that embedding AI assistants into dominant platforms could lead to unfair advantages in emerging AI markets.

By relying on its established user base and platform integration, Meta may effectively foreclose competition by making alternative AI services harder to access or less visible to consumers. Such a case would not be the first time Meta has faced regulatory scrutiny in Europe.

The company has been the subject of multiple investigations across the EU concerning data protection, content moderation, advertising practices, and market dominance. The current probe adds to a growing list of regulatory pressures facing the tech giant as it expands its AI capabilities.

The AGCM’s investigation comes amid broader EU efforts to ensure fair competition in digital markets. With the Digital Markets Act and AI Act emerging, regulators are becoming more proactive in addressing potential risks associated with integrating advanced technologies into consumer platforms.

As the investigation continues, Meta’s use of AI within WhatsApp will remain under close watch. The outcome could set an essential precedent for how dominant tech firms can release AI products within widely used communication tools.

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Google backs EU AI Code but warns against slowing innovation

Google has confirmed it will sign the European Union’s General Purpose AI Code of Practice, joining other companies, including major US model developers.

The tech giant hopes the Code will support access to safe and advanced AI tools across Europe, where rapid adoption could add up to €1.4 trillion annually to the continent’s economy by 2034.

Kent Walker, Google and Alphabet’s President of Global Affairs, said the final Code better aligns with Europe’s economic ambitions than earlier drafts, noting that Google had submitted feedback during its development.

However, he warned that parts of the Code and the broader AI Act might hinder innovation by introducing rules that stray from EU copyright law, slow product approvals or risk revealing trade secrets.

Walker explained that such requirements could restrict Europe’s ability to compete globally in AI. He highlighted the need to balance regulation with the flexibility required to keep pace with technological advances.

Google stated it will work closely with the EU’s new AI Office to help shape a proportionate, future-facing approach.

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EU AI Act begins as tech firms push back

Europe’s AI crackdown officially begins soon, as the EU enforces the first rules targeting developers of generative AI models like ChatGPT.

Under the AI Act, firms must now assess systemic risks, conduct adversarial testing, ensure cybersecurity, report serious incidents, and even disclose energy usage. The goal is to prevent harms related to bias, misinformation, manipulation, and lack of transparency in AI systems.

Although the legislation was passed last year, the EU only released developer guidance on 10 July, leaving tech giants with little time to adapt.

Meta, which developed the Llama AI model, has refused to sign the voluntary code of practice, arguing that it introduces legal uncertainty. Other developers have expressed concerns over how vague and generic the guidance remains, especially around copyright and practical compliance.

The EU also distinguishes itself from the US, where a re-elected Trump administration has launched a far looser AI Action Plan. While Washington supports minimal restrictions to encourage innovation, Brussels is focused on safety and transparency.

Trade tensions may grow, but experts warn that developers should not rely on future political deals instead of taking immediate steps toward compliance.

The AI Act’s rollout will continue into 2026, with the next phase focusing on high-risk AI systems in healthcare, law enforcement, and critical infrastructure.

Meanwhile, questions remain over whether AI-generated content qualifies for copyright protection and how companies should handle AI in marketing or supply chains. For now, Europe’s push for safer AI is accelerating—whether Big Tech likes it or not.

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Australia reverses its stance and restricts YouTube for children under 16

Australia has announced that YouTube will be banned for children under 16 starting in December, reversing its earlier exemption from strict new social media age rules. The decision follows growing concerns about online harm to young users.

Platforms like Facebook, Instagram, Snapchat, TikTok, and X are already subject to the upcoming restrictions, and YouTube will now join the list of ‘age-restricted social media platforms’.

From 10 December, all such platforms will be required to ensure users are aged 16 or older or face fines of up to AU$50 million (£26 million) for not taking adequate steps to verify age. Although those steps remain undefined, users will not need to upload official documents like passports or licences.

The government has said platforms must find alternatives instead of relying on intrusive ID checks.

Communications Minister Anika Wells defended the policy, stating that four in ten Australian children reported recent harm on YouTube. She insisted the government would not back down under legal pressure from Alphabet Inc., YouTube’s US-based parent company.

Children can still view videos, but won’t be allowed to hold personal YouTube accounts.

YouTube criticised the move, claiming the platform is not social media but a video library often accessed through TVs. Prime Minister Anthony Albanese said Australia would campaign at a UN forum in September to promote global backing for social media age restrictions.

Exemptions will apply to apps used mainly for education, health, messaging, or gaming, which are considered less harmful.

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