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EU AI Act: Are You Prepared for the “AI Literacy” Principle?

The EU AI Act is the world’s first horizontal and standalone law governing the commercialization and use of AI, and a landmark piece of legislation for the EU. Among the various provisions of the EU AI Act, the “AI literacy” principle is an often overlooked but key obligation which requires organizations to ensure that staff who are involved in the operation and use of AI have the necessary skills, knowledge and understanding to adequately assess AI-related risks and opportunities (e.g., through training and hiring staff with the appropriate background and skillset). This obligation – which applies from February 2, 2025 – is one of the few obligations under the EU AI Act that applies to all AI systems i.e., irrespective of the level of risk that the AI system presents. Indeed, by introducing AI literacy as one of the first provisions of the AI Act (Article 4), the EU legislators appear to underscore the significance of this requirement.

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U.S. Treasury Issues Final Rule Restricting Outbound Investments in Chinese-Affiliated Entities

On October 28, 2024, the U.S. Department of the Treasury (Treasury) released the Final Rule for its new regulations prohibiting or requiring notification of U.S. outbound investments in certain Chinese-affiliated companies in the semiconductor and microelectronics, quantum information technology, and artificial intelligence (AI) sectors. The Final Rule will take effect on January 2, 2025.

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Rising AI Enforcement: Insights From State Attorney General Settlement and U.S. FTC Sweep for Risk Management and Governance

Recent enforcement actions by both state and federal law enforcement signal that companies that make or use artificial intelligence products are facing increased scrutiny under existing unfair and deceptive acts and practices laws. Several late-2024 examples present important insights for companies navigating how to effectively and legally implement artificial intelligence technologies in their businesses.

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Biometric Litigation Risks Endure Even Post BIPA Amendment

Enacted in 2008, the Illinois Biometric Information Privacy Act (“BIPA”) regulates the collection and possession of biometric data by private entities operating in Illinois. Biometric data includes, for example, fingerprints, voiceprints, eye scans, and face/hand scans. Notably, BIPA establishes a private right of action, allowing any person to seek damages, attorneys’ fees, and injunctive relief if the person has been aggrieved by a BIPA violation. The statutory damages for BIPA violations are steep, including $1,000 to $5,000 per violation, attorneys’ fees and costs, and the possibility of injunctive relief.

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FY2024 in Review: SEC Enforcement Actions Against Investment Advisers to Private Funds, Registered Funds, and Retail Clients

In its 2024 fiscal year, the U.S. Securities and Exchange Commission brought over 130 enforcement actions against investment advisers and their representatives. This post highlights the key areas of focus and notable actions and litigation from the past fiscal year.

Please click here to view the full Sidley Update.

Massachusetts’ Highest Court Signals Willingness to Scrutinize State Wiretapping Laws and Knock Out Claims at the Pleading Stage

For the past few years, hundreds of companies have been caught in a wave of privacy class actions relying on decades-old wiretapping laws to attack modern website technologies and business tools. Last week, Massachusetts’s highest court engaged in a thorough assessment of that state’s wiretap law and rejected plaintiff’s argument that commonly used website advertising and analytical tools intercepted “communications” in violation of the law. The basis for the suit is not novel — hundreds of similar cases have been filed in the past few years. But the Supreme Judicial Court’s willingness to engage in a deep analysis of the wiretapping law early in the case is noteworthy.

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CFPB Releases Final Rule on Personal Financial Data Rights

On October 22, 2024, the U.S. Consumer Financial Protection Bureau (CFPB) issued a final rule under Section 1033 of the Consumer Financial Protection Act of 2010.1 The final rule includes several important changes from the proposed rule. This client alert focuses on those changes. For an analysis of the proposed rule, please see our Sidley Update here. The final rule also includes hundreds of pages of Supplementary Information that provide important insights into the manner in which the CFPB will enforce the final rule.

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Second Circuit Offers Guidance on Meaning of “Consumer” Under the U.S. Video Privacy Protection Act

Yesterday, in Salazar v. National Basketball Association, the Second Circuit Court of Appeals reversed a district court’s dismissal of a putative class action under the Video Privacy Protection Act (VPPA), offering an interpretation of the VPPA’s definition of “consumer” that differs from how the majority of courts have used that term.

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<a target=‘_blank’ href="https://www.sidley.com/en/people/a/akowuah-kwaku-a">Kwaku A. Akowuah</a>

Kwaku A. Akowuah

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/a/armbrust-sheila-a-g">Sheila A.G. Armbrust</a>

Sheila A.G. Armbrust

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Francesca Blythe

London
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Colleen Theresa Brown

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/c/cunningham-thomas-d">Thomas D. Cunningham</a>

Thomas D. Cunningham

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/f/flanagan-sharon-r">Sharon R. Flanagan</a>

Sharon R. Flanagan

San Francisco, Palo Alto
<a target=‘_blank’ href="https://www.sidley.com/en/people/g/gordon-david-a">David A. Gordon</a>

David A. Gordon

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/i/ishiara-tomoki">Tomoki Ishiara</a>

Tomoki Ishiara

Tokyo
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/lally-amy-p">Amy P. Lally</a>

Amy P. Lally

Century City
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/lashway-david-c">David C. Lashway</a>

David C. Lashway

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/long-william-rm">William RM Long</a>

William RM Long

London
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/loughnane-joan-m">Joan M. Loughnane</a>

Joan M. Loughnane

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/malhotra-geeta">Geeta Malhotra</a>

Geeta Malhotra

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/ransom-rollin-a">Rollin A. Ransom</a>

Rollin A. Ransom

Los Angeles
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/raul-alan-charles">Alan Charles Raul</a>

Alan Charles Raul

Washington, D.C., New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/s/seale-jennifer-b">Jennifer B. Seale</a>

Jennifer B. Seale

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/t/tham-yuet-ming">Yuet Ming Tham</a>

Yuet Ming Tham

Singapore, Hong Kong
<a target=‘_blank’ href="https://www.sidley.com/en/people/w/wilan-jonathan-m">Jonathan M. Wilan</a>

Jonathan M. Wilan

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/w/woods-jr-john-w">John W. Woods Jr.</a>

John W. Woods Jr.

Washington, D.C.

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