US Archives | Digital Watch Observatory

New Mexico wins major case against Meta

A jury has found Meta Platforms liable for misleading consumers and endangering children in a landmark case brought by the New Mexico Department of Justice. The verdict marks the first successful trial by a US state against a major tech firm over child safety concerns.

Jurors awarded civil penalties totalling 375 million dollars after finding violations of consumer protection law. The case focused on claims that platform design choices exposed young users to harmful and exploitative content.

Evidence presented in court included internal company documents and testimony suggesting awareness of risks to children. Allegations centred on failures to prevent exploitation, as well as features linked to addictive behaviour and exposure to harmful material.

Further proceedings in the US are scheduled, with authorities seeking additional penalties and mandated changes to platform safety measures. Proposed actions include stronger age verification and improved protections for minors online.

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CFTC launches AI and crypto innovation task force

The Commodity Futures Trading Commission (CFTC), an independent agency of the United States federal government, announced the creation of an Innovation Task Force to support the development of new technologies in US derivatives markets. Chairman Michael S. Selig leads the initiative and focuses on establishing clear regulatory approaches.

The task force will work with the Innovation Advisory Committee to develop frameworks covering crypto assets, blockchain technologies, AI and autonomous systems, and prediction markets. Authorities said the aim is to provide clarity for innovators building new financial products.

According to Selig, clearer rules are intended to support responsible innovation and ensure market participants remain competitive. The task force is also expected to help implement the Commission’s broader innovation agenda.

Coordination with other federal bodies is planned, including collaboration with the US Securities and Exchange Commission and its Crypto Task Force. Michael J. Passalacqua, senior advisor to the Chairman, has been appointed to lead the initiative.

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Europe boosts AI, talent and investment to compete with US and China

Efforts to strengthen technological competitiveness in Europe focus on advancing AI capabilities, developing new forms of talent and improving access to investment.

Discussions at the CTx Tech Experience in Seville highlighted a growing consensus that innovation must scale more effectively if the region is to compete globally.

Participants emphasised that Europe continues to face structural challenges, including fragmented markets, regulatory complexity and limited capital for high-growth companies.

These constraints have made it more difficult for startups to expand, prompting calls for stronger coordination between public institutions and private investors.

AI is increasingly viewed as the foundation of the transformation. Industry leaders pointed to the emergence of new business opportunities driven by AI, alongside the need to translate innovation into scalable commercial outcomes.

At the same time, labour market dynamics are shifting towards hybrid skillsets that combine technical expertise with business understanding and critical thinking.

In such a context, strengthening Europe’s innovation capacity is seen as essential to competing with global powers such as the US and China.

As technological competition intensifies, the ability to align talent, capital and policy frameworks will play a decisive role in shaping the region’s position within the global digital economy.

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US senator proposes AI rules for children

A US senator has introduced a draft framework to establish nationwide AI rules, with a focus on child safety and copyright protection. The proposal seeks to create a unified federal approach to replace state laws that differ.

The plan would require developers to implement safeguards for minors, including age verification, data protection and mechanisms to report harm. Companies could also face legal action over failures linked to AI system design.

Copyright measures include new standards for identifying AI-generated content and preventing tampering. Authorities would also develop cybersecurity guidelines to support the transparency and authenticity of content.

Debate over this in the US continues over the balance between regulation and innovation, with some stakeholders warning of legal and economic risks. Discussions between lawmakers and the administration are expected to shape a final framework.

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EU calls on US tech firms to respect rules on handling staff data

Concerns over data protection have intensified as the European Commission calls on major technology companies to apply the EU standards when handling sensitive staff information linked to digital regulation.

Pressure follows requests from the US House Judiciary Committee seeking access to communications between US firms and the EU officials involved in enforcing laws such as the Digital Services Act and Digital Markets Act.

The EU officials emphasise that formal exchanges with companies take place through official channels, including documented correspondence, rather than informal messaging platforms. Internal communication practices may involve encrypted tools, reflecting growing concerns about data security and external scrutiny.

Debate surrounding the issue reflects wider tensions between the EU and the US over digital governance, privacy protections and regulatory authority. Questions over jurisdiction and access to sensitive communications are likely to remain central as transatlantic tech policy evolves.

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EU urged to push digital tax despite US opposition

Calls for an EU-wide digital services tax are growing, as Pasquale Tridico, chair of the European Parliament’s subcommittee on tax matters, urged Brussels to act despite strong opposition from the US. He argued that such a measure would make Europe’s tax system fairer in a market dominated by foreign tech firms.

Tensions have increased as Washington threatens tariffs on countries introducing digital taxes targeting major platforms. Existing national levies in countries like France contrast with the absence of a unified EU approach due to member state control over taxation.

The proposal comes amid wider strain in transatlantic relations, with disputes over trade, regulation and influence on EU policymaking. US criticism has also focused on European rules such as the Digital Services Act and the Digital Markets Act.

Supporters argue that a digital tax would apply equally to global companies, not only US firms, while addressing imbalances between sectors. Digital businesses can generate large profits without the same physical costs faced by traditional industries.

Further proposals include new approaches to taxing wealth, reflecting how digitalisation blurs the line between income and capital. Advocates say such reforms are needed to adapt taxation to the modern economy.

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OpenAI says ChatGPT advertisements remain limited to the US

Despite speculation that the feature was expanding internationally, OpenAI has clarified that advertisements in ChatGPT are currently available only to users in the US.

Questions about a broader rollout emerged after references to advertisements appeared in the platform’s updated privacy policy. Some users interpreted the language as evidence that advertising would soon be introduced globally.

OpenAI said the policy update does not signal an immediate expansion. According to the company, advertising features are still being tested within the US as part of a gradual deployment strategy.

ChatGPT advertisements were introduced in February 2026 and appear below responses generated by the chatbot. The ads are shown only to logged-in users on free subscription tiers and are not displayed to users under eighteen.

Company representatives stated that advertising systems operate independently from the AI model that generates responses. According to OpenAI, advertisers cannot influence or modify the content produced by ChatGPT.

The company also said it does not share user conversations or personal chat histories with advertisers. However, advertisements may still be personalised based on user queries, which has prompted discussions about how conversational interfaces could shape consumer decisions.

OpenAI indicated that it is adopting a cautious, phased approach before considering any wider rollout of ChatGPT advertising features in other markets.

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EU privacy watchdogs warn over US plans to expand traveller data collection

European privacy authorities have raised concerns about proposed changes to the Electronic System for Travel Authorisation that could require travellers to the US to disclose extensive personal information, including social media activity.

The European Data Protection Board, which coordinates national data protection authorities across the EU, sent a letter to the European Commission asking whether the institution plans to intervene or respond to the updated requirements.

A proposal that would apply to visitors entering the US through the visa-waiver programme for short stays of up to 90 days.

Under the proposed changes, travellers may be required to provide details about their social media accounts covering the previous five years.

Authorities could also request personal data about family members, including addresses, phone numbers and dates of birth, information that privacy regulators argue is unrelated to travel authorisation.

Watchdogs also questioned how EU citizens could exercise their data protection rights once such information is transferred to US authorities, particularly regarding storage periods and potential misuse.

Parallel negotiations between the EU and the US have also attracted attention.

Discussions around a potential Enhanced Border Security Partnerships framework could allow US authorities to seek access to biometric databases held by European countries, including facial scans and fingerprint records.

European privacy regulators warned that such measures could raise significant concerns regarding fundamental rights and personal data protection for travellers from the EU.

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AI agents face growing prompt injection risks

AI developers are working on new defences against prompt-injection attacks that aim to manipulate AI agents. Security specialists warn that attackers are increasingly using social engineering techniques to influence AI systems that interact with online content.

Researchers say AI agents that browse the web or handle user tasks face growing risks from hidden instructions embedded in emails or websites. Experts in the US note that attackers often attempt to trick AI into revealing sensitive information.

Engineers are responding by designing systems that limit the impact of manipulation attempts. Developers in the US say AI tools must include safeguards preventing sensitive data from being transmitted without user approval.

Security teams are also introducing technologies that detect risky actions and prompt users for confirmation. Specialists argue that strong system design and user oversight will remain essential as AI agents gain more autonomy.

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CEOs track new metric in AI workforce shift

Executives across the US are increasingly using a metric known as labour cost margin to evaluate workforce needs in the AI era. Business leaders in the US say the measure reflects how companies balance human labour with expanding technology investments.

A KPMG survey of 100 US CEOs shows strong corporate commitment to AI spending. Nearly 80 percent of executives allocate at least five percent of capital budgets to AI projects.

The workforce impact remains uncertain despite growing investment. Many executives expect AI to change job composition rather than eliminate roles.

Companies are hiring new technology-focused roles, including AI strategists and workflow coordinators. Analysts say repetitive office tasks in the US may face the greatest risk from automation.

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