Regulatory Watch – March 2026

Federal AI law moves closer as White House proposes ‘light touch’ regulation

The US government has proposed a new AI law that calls for greater parental control over children’s privacy and age verification, but resists the creation of a federal watchdog and urges ‘industry-led standards’.  The unexpected move comes after Republican senator Marsha Blackburn released a draft of a more sweeping bill which would allow AI companies to be sued for certain harms. The administration has twice failed to pass legislation against state-level law and instead issued an executive order threatening to withhold funding from states that pass ‘onerous’ AI laws.

European Commission’s ‘credibility on the line’ over Google investigation

European publishers and tech firms have written to EU leaders urging them to complete their two-year investigation into Google and issue a fine. The case concerns Google’s alleged favouring of its own services in online searches in breach of the Digital Markes Act, and was opened in March 2024. EU regulators says that they aim to complete DMA investigations within 12 months, but the case is thought to have been complicated by clashes with the US over attempts to curb the influence of big tech. The letter, from the European Publishers Council, calls for the investigation to be finished in the next week, arguing that the credibility of the European Commission is ‘on the line’, and that, ‘it is important that sustained pressure to dilute the DMA is not shown to have succeeded’.

Anthropic sues US government for calling it a risk

AI firm Anthropic has taken the unprecedented step of taking legal action after it was described by the US government as a ‘supply chain risk’. The US Department of Defense has been in dispute with Anthropic after the company refused to allow the military unfettered use of its AI models. Anthropic has argued that the Constitution ‘does not allow the government to wield its enormous power to punish a company for its protected speech’, and that ‘No federal statute authorizes the actions taken here.’ A White House spokeswoman said that ‘Under the Trump Administration, our military will obey the United States Constitution – not any woke AI company’s terms of service.’

India’s national ID app meets resistance over pre-loading 

Reuters reports that attempts by the Indian government to get major platforms to pre-install its Aadhaar biometric identification app have met with resistance from the industry. MAIT, the body representing the Indian IT industry, is reported to have pushed back on six similar requests to pre-load apps, seen by the government as an important means of increasing distribution. The Aadhaar app is used by 1.34 billion users for verification in banking, telecoms and airport entry. Although the Indian government says the system is secure, privacy campaigners have criticised data leaks which have resulted in the personal details of hundreds of millions of holders surfacing on the dark web.

North Korea using AI to deploy ‘fake workers’

Cyber experts describe North Korea as global experts in the ‘fake worker’ phenomenon, using AI to deceive firms into hiring North Korean operatives. The scam typically involves stealing an identity such as a dormant Linked In account or paying account holders for access. Generative AI is then used to create digital avatars and deepfake video filters to appear in remote job interviews. North Korean fake workers have infiltrated more than 300 US firms, according to the Department of Justice, and Amazon recently announced that it has prevented more than 1800 suspected North Korean operatives from getting jobs since April 2024. Threat intelligence experts say that the phenomenon is increasingly spreading to Europe.

Sources:  The Financial Times, The Wall Street Journal, Bird and Bird, APNews, Euronews, CNN, The Guardian, The Daily Telegraph, Bloomberg, Euractiv, Ars Technica, Reuters, BBC, Politico, Telecompaper.