Tech Sector Risk Watch

Spain May Be an Emerging AI Hotspot, Leading the Way for a Spike in Cross-Border M&A

Several major law firms have expressed concern that restrictions under consideration are overly broad.

4 minute read

August 10, 2023 | Analysis

FTC Shows Willingness to Use Extreme Measures to Tame AI

Spain's artificial intelligence market has flown under the radar. But with several homegrown AI startups likely to excel in Spanish-speaking countries, U.S. tech companies sense acquisition opportunities.

4 minute read

August 10, 2023 | Analysis

As Cyberattacks Rise, Firms Face 'Significantly Broadened' Duty to Protect Worker Data

"The FTC hopes companies violating consumer privacy to cheaply train their AI may think twice because the punishment is becoming more severe," a recent Holland and Knight client briefing says.

5 minute read

July 20, 2023 | Analysis

AI 'Scraping' Lawsuits Will Help Shape Largely Uncharted Legal Terrain

"The employee is handing you this information so they can do their job as your employee. And so you have to take reasonable steps to protect it," said Becky Baker, a Vinson & Elkins partner.

5 minute read

July 20, 2023 | Analysis

Threads' Unique Deletion Provision May Be a Risky Approach for Others to Follow

"AI makers that aren't paying rapt attention to the legal dimension or opt to shrug it off will readily find themselves in hot water and facing a bona fide material risk to their business," AI expert Lance Eliot said.

7 minute read

July 20, 2023

Regulators Swarm Around Payment Apps, Raising Fears of Enforcement Spree

The provision in Threads' privacy notice that users may only delete their Threads profile by deleting their Instagram account may run afoul of dark pattern, antitrust and privacy regulations.

6 minute read

July 13, 2023 | Analysis

Tech Firms Slow to Ditch 'Stack Ranking,' Despite Evidence It Saps Worker Morale, Productivity

Among the concerns highlighted by the Consumer Financial Protection Bureau is that consumers may not understand that most accounts are not covered by deposit insurance.

6 minute read

July 13, 2023 | Analysis

By Riley Brennan

The employee-review system, which results in 10% of workers being classified as low performers, has appeal in the analytically inclined tech industry. But critics say it invites arbitrary judgments and bias.

4 minute read

July 13, 2023 | Analysis

After Punching Amazon Repeatedly, FTC Prepares to Unleash Haymaker

Antitrust Blitzkrieg Against Google Tests Company on Myriad Fronts

Bloomberg reports that the FTC is preparing to file a far-reaching antitrust lawsuit against the tech giant, in what's likely to be a career-defining moment for controversial agency chair Lina Khan.

4 minute read

July 06, 2023 | Analysis

Rule Hastening Disclosure of Cyber Breaches Likely to Ignite Litigation, Insurance Headaches

Tech analyst Joseph Teasdale said the intense regulatory scrutiny could hamstring Google as it seeks to outmaneuver rivals, leaving it "very wary about wielding its full power."

9 minute read

September 07, 2023 | Analysis

Rising Silicon Valley Drug Use Puts GCs in Tough Spot

"My fear is the disclosures that the rules require companies to make in a big rush may force companies to have to 'go public' before they fully understand the situation," insurance executive Kevin LaCroix wrote in a blog post.

7 minute read

July 06, 2023 | Analysis

As Privacy Laws Proliferate, So Does Mismatch Between Companies' Notices, Practices

"Terminating a star employee—or any employee—based solely on the fact that the employee ingested a sub-perceptual amount of a psychedelic drug may not make business sense," according to Vincent Sliwoski, managing partner of Harris Bricken Sliwoski.

4 minute read

July 06, 2023 | Analysis

Tech Firms Waffle on Metaverse Investments, as FOMO and Fear of Throwing Money Down Drain Collide

"It takes a mature organization to have processes that require a product developer or a marketer to always check in with their privacy team before they move ahead," said Lynn Parker Dupree, partner at Finnegan.

4 minute read

June 29, 2023 | Analysis

The CHIPS Act Tasks Tech Companies With Reshaping the Workforce Through Better Child Care

"Building the metaverse is a long-term project, but the rationale for it remains the same and we remain committed to it," Meta CEO Mark Zuckerberg said.

4 minute read

June 29, 2023 | Analysis

Research Unearths an Ugly Truth: Lawyers Are Undermining Cybersecurity

The Biden administration announced a policy this spring requiring any semiconductor manufacturer requesting over $150 million in federal funding to submit plans for how the company will provide its employees with affordable, high-quality child care.

4 minute read

June 29, 2023 | Analysis

What In-House Counsel Should Take Away From a Pair of Children's Privacy Mega-Settlements

"There have been a string of opinions that have put lawyers in a position where if they were to do their job competently they would essentially be putting their clients at risk because they would be creating documents that can be used in litigation or an investigatory proceeding," said David Saunders, a partner at McDermott Will & Emery.

8 minute read

June 22, 2023 | Analysis

Drone-Friendly States Helping Industry Clean Up Regulatory Morass

"Data is seen as an asset, and the goal of the in-house counsel is to maximize asset value and minimize the liability," said Mark Rasch, of counsel at Kohrman Jackson & Krantz.

4 minute read

June 22, 2023 | Analysis

Suits Flooding Courts Seize on Decades-Old Wiretapping Laws to Allege Data Breaches

"Preemption of inconsistent local law is a critical part of any state ... legislation," said Sara Baxenberg, counsel for the Association for Uncrewed Vehicle Systems International.

6 minute read

June 22, 2023 | Analysis

Legion of Lawsuits Against Amazon Highlights Tech's Exposure, Say Experts

"We have yet to see a ruling at the heart of the matter, and until we see such a ruling we're not going to see these things go away," said Michael Bahar, a partner at Eversheds Sutherland.

7 minute read

June 15, 2023 | Analysis

Climate Change Will Up Pressure on Tech Over Energy-Hungry Data Centers

"These lawsuits are a case study of what's going on throughout the United States, and it's illustrating and bringing into focus certain pressure points," Duane Morris partner Gerald Maatman, Jr. said.

4 minute read

June 15, 2023

International Regulators' Unease With AI Data-Scraping Creates Gulf With US

"The scale of the challenge is great and growing fast," the Association of Computing Machinery's Tech Policy Council said in a 2021 brief.

7 minute read

September 07, 2023 | Analysis

Will Return-to-Work Mandates Ramp Up or Reduce Tech Worker Burnout?

"Mass data scraping of personal information can constitute a reportable data breach in many jurisdictions," an international group of privacy watchdogs warned.

7 minute read

June 15, 2023 | Analysis

By Mason Lawlor

"I'm not necessarily convinced there's a burnout from going back to work. I think there is a stressor from the standpoint of just people haven't changed the routine they've been in for three years," said Doug Luftman, chief legal officer of ScaleWith.

5 minute read

June 01, 2023 | Analysis

Surgeon General's Warning Adds to Heat on Social Media Platforms

Cyberattacks Are Accelerating With AI's Help

"In-house counsel at social media companies need to take this report seriously," said Jason Winmill, managing partner of Argopoint. "They would be well-advised to craft a proactive plan to address the messages in the report."

4 minute read

June 01, 2023 | Analysis

Tech Companies Under Attack for Giving Founders Outsized Voting Power

"If you're a bad guy and you're not using ChatGPT or other LLMs to go and find vulnerabilities, you're probably not doing your job as a bad guy," said Scott Giordano, general counsel of Spirion.

4 minute read

June 01, 2023 | Analysis

Pressure on Yelp Underscores That Shareholder Activists Are Still Lurking Around Tech

Activist investors and shareholder-advisory firms say dual-class share structures can create fiefdoms. Supporters say they allow companies to focus on long-term value creation.

6 minute read

May 25, 2023 | Analysis

By Greg Andrews

"Info tech … will likely face continued shareholder pressure, especially those with low profitability," Goldman Sachs said in a report last month.

3 minute read

May 25, 2023 | Analysis

'Say Your Prayers': Meta's $1.3B Fine Might Not Be Last EU Data-Privacy Bombshell

'Fast and Furious': As AI Accelerates, So Does Corporate 'Risk Velocity'

"As we have seen from the recent news, the cost of noncompliance is becoming quite high," said Ken Kumayama, a partner at Skadden, Arps, Slate, Meagher & Flom.

4 minute read

May 25, 2023 | Analysis

The Race to Regulate: Congress Hints at How It Will Tackle Generative AI

The sudden collapse of Silicon Valley Bank is a textbook example of how quickly risks can skyrocket. Experts say that's why being proactive is so important.

4 minute read

May 18, 2023 | News

By Riley Brennan

"I think the U.S. should lead here and do things first, but to be effective we do need something global," said Samuel Altman, CEO of OpenAI.

6 minute read

May 18, 2023 | Analysis

EU's Digital Services Act Targets Big Tech, But Its Impact Could Ripple Far and Wide

Tech Companies That Bungle Layoffs Can Compound Their Problems

"Starting to comply with the DSA will be a game changer in terms of how the platforms and the biggest search engines are structured and dealing with compliance, transparency, governance, reporting, independent audits," said Dessislava Savova, Paris-based leader of Clifford Chance's tech group.

5 minute read

May 18, 2023 | Analysis

SEC's Probe of SolarWinds Hack Targets Execs, but for Doing What?

"In the past, a company's decision to eliminate positions may have been protested by a small group of labor rights advocates. Today, thanks to social media, anyone can challenge workforce reduction decisions," said Sandra Sucher, a Harvard professor of management practice.

4 minute read

August 31, 2023 | Analysis

Meta's Shifting Fines in Ireland Reflect Growing Pains for EU Data Privacy Regulation

The cybersecurity community is closely watching the inquiry to see if the agency is embracing the trend of holding individual officers liable for a company's response to a data breach.

5 minute read

May 11, 2023 | Analysis

By Anne Bagamery

"Data regulation in Europe is not so complicated, but it's not so easy, either," said Marc Mossé, senior counsel at the French firm August Debouzy and a former attorney at Microsoft.

6 minute read

May 11, 2023 | Analysis

Meta's Shifting Fines in Ireland Reflect Growing Pains for EU Data Privacy Regulation

By Anne Bagamery

"Data regulation in Europe is not so complicated, but it's not so easy, either," said Marc Mossé, senior counsel at the French firm August Debouzy and a former attorney at Microsoft.

6 minute read

May 11, 2023 | Analysis

What Executives Should Take From Ex-Uber Security Chief Joe Sullivan's Sentence

Corporate Bans of AI Tools Come With Their Own Risks

"What everyone in the industry wants to understand is, where is the line, and how can we be sure we're not crossing it?" said Ed McAndrew, a former cybercrime prosecutor.

6 minute read

May 11, 2023 | Analysis

Escalation of China-Taiwan Tensions Could Create Mayhem for Chip-Reliant U.S. Tech Firms

"You can ban it on company equipment but you can't ban it on other devices that employees might be using. It would be like banning email, or Google search, or a reticence to using the Google enterprise suite of products," said Nithya Das, former chief legal officer of Olo.

7 minute read

May 04, 2023 | Analysis

By Allison Dunn

"Ultimately, the full social and economic impacts of a chip shortage of that scale are incalculable, but they would likely be catastrophic," according to a Rhodium Group report.

5 minute read

May 04, 2023 | Analysis

Is Cloud Slowdown Economy-Driven or a Long-Term Trend?

By Greg Andrews

"Few folks appreciate how much new cloud business will happen over the next several years from the pending deluge of machine learning that's coming," Amazon CEO Andy Jassy said.

4 minute read

May 04, 2023 | Analysis

Tech Firms Risk Backlash With Increasingly Public Criticism of Regulators

State's New Medical Privacy Law Poised to 'Add More Fuel to the Fire' of Big Tech Litigation

"There's an old joke which says never to get into a fight with anyone who buys ink by the barrel. Fighting with regulators is pretty similar because, like it or not, they have immense power," corporate governance expert Charles Elson said.

4 minute read

April 27, 2023 | Analysis

By Riley Brennan

The measure in Washington state is the first U.S. privacy law to contain a "private right of action" provision since 2008.

6 minute read

April 27, 2023 | Analysis

Sanctions Compliance Tripping Up Tech Firms

Shareholder Proposals Put Tech Firms on Human Rights Hot Seat

Investigators are getting more aggressive, and the geopolitical landscape is growing more complex.

3 minute read

April 27, 2023 | Analysis

Tech Giant Apple, Other Big Firms Face Rising Shareholder Heat Over China Reliance

At the same time, activists also are advocating for reforms on core business issues, such as executive pay and stock structures that give insiders outsized voting rights.

6 minute read

April 12, 2023 | Analysis

Landmark Ruling Likely to Spark Frenzy of Union Organizing in Tech Industry

Activists concerned about China's human rights violations and other behavior hope to spur change, and perhaps cause corporate titans to squirm, by pushing shareholder proposals at the companies' annual meetings.

7 minute read

August 31, 2023 | Analysis

Report Predicts $8 Trillion in Losses From Cyber Threats This Year

"Tech companies can expect an increase in union organizing, because the likelihood of the union prevailing in its effort to organize non-union employees has just gone up a lot," said Robert Nagle, a Fox Rothschild partner.

4 minute read

April 12, 2023 | Analysis

By Colleen Murphy

"Phishing has evolved past the Nigerian prince who wants to give you an inheritance you have never heard of, to somebody that you work with in accounting sending you what looks like a legitimate email saying, 'There has been a last-minute change on the deal, and we need to change the wire transfer numbers,'" said Edward McNicholas, a Ropes & Gray partner.

5 minute read

April 12, 2023 | Best Practices

Supercomputers Soon Will Crack Encryption. Is Your Company Ready?

The FTC Is Coming for the Cloud Providers

"With this level of breach that can and will happen, you can't afford to take a wait-and-see approach if you are managing sensitive data," said Rebecca Krauthamer, co-founder of quantum cybersecurity software firm QuSecure.

6 minute read

April 05, 2023 | Analysis

A New Chapter in Global Data Privacy: Shifting Liability to Executives

"They are very skeptical of deeply concentrated markets and the various types of risks those can create," said Ben Rossen, a former senior attorney at the FTC.

6 minute read

April 05, 2023 | Analysis

Legal Teams, Sticklers for Confidentiality, Must Be on Guard for AI Tools With 'Loose Lips'

"It's a warning shot to those individuals who are in a capacity to make decisions," said Cassandra Gaedt-Sheckter, a partner at Gibson, Dunn and Crutcher.

5 minute read

April 06, 2023 | Analysis

Google's Use of 'History Off' Chats Offers Lessons for In-House Counsel

"If anybody is saying, 'We're training our generative model by taking all of our customer contracts,' I would truly worry. Not everyone knows how to do this safely," said Gaurav Oberoi, CEO of Lexion.

4 minute read

March 30, 2023

Other States May Join Utah in Restricting Teens' Social Media Access

"Any experienced counsel should be advised to think through scenarios where documentation is needed," said H. Gregory Baker, a partner at Patterson Belknap.

5 minute read

March 30, 2023 | Analysis

Amid Growing U.S.-China Tensions, Not All Tech Companies Can Stomach the Rising Risk

"This is one of those situations where the problem is complicated. And this one may go too far to one side," Squire Patton Boggs partner Julia Jacobson said of the Utah legislation.

5 minute read

March 30, 2023 | Analysis

By Mason Lawlor

"For larger multinationals, China is a huge market for them, so they want to engage there, and they just try to manage their risk to the extent they can," said Cortney Morgan, a partner at Husch Blackwell.

5 minute read

March 23, 2023 | Analysis

Trust in Big Tech Is Plunging, Putting Sector at Crossroads

Generative AI Tools Threaten Big Tech's Digital Advertising Dominance

"Organizations that ignore or downplay the ethical issues associated with developing and using emerging technologies risk multiple forms of legal, reputational and organizational damage that can erode profitability and trust," according to Beena Ammanath, managing director of Deloitte Consulting.

5 minute read

March 23, 2023 | Analysis

Outcome of 'Self-Driving' Vehicle Suits May Hinge on Innovators' Risk-Management Strategies

"Data is not oil. It's water that will be shared by everyone. Every company is trying to figure out how to build a relationship with the customer and provide something of value to them," said Vijay Viswanathan, a marketing professor at Northwestern University.

4 minute read

August 31, 2023 | Analysis

AI's 'Hallucinations' Add to Risks of Widespread Adoption

"Legal reality is likely to be less accepting of driver responsibility than the car manufacturers might hope," said Cassandra Burke Robertson, a law professor at Case Western Reserve University.

5 minute read

March 23, 2023 | Analysis

National Security Legislation Would Force Tech Firms Into Complex 'Supply Chain' Audits

"Trust is the foundation of the legal system. If you can't trust what [AI tools] are saying, it can tear everything apart," said Michael Sander, managing director of the legal analytics firm Docket Alarm.

4 minute read

March 16, 2023 | Analysis

Legal Chiefs Increasingly Handle Legwork to Avoid Cyber Insurance Sticker Shock

Though still in its early stages, the bipartisan Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT Act) is expected to eventually pass, increasing due diligence burdens on tech companies both big and small.

5 minute read

March 16, 2023 | Analysis

'Preparation, Preparation, Preparation': How Smaller Tech Companies Can Mitigate Climate Disclosure Risks

"An insured has to be able to tell a good story," said Daniel Burke, senior vice president of the cyber practice at Woodruff Sawyer & Co.

6 minute read

March 16, 2023 | Analysis

In the EU, Issues Raised by Section 230 Are Already Being Addressed

A potentially forthcoming climate reporting requirement from the U.S. Securities and Exchange Commission has legal experts worried about a looming litigation risk for companies that don't have a robust team in place for tracking emissions data.

5 minute read

February 23, 2023 | Analysis

By Anne Bagamery

The 27 European Union member states are preparing for 2024's full rollout of the Digital Services Act, which potentially could become a model for legislation in the U.S.

6 minute read

February 23, 2023 | Analysis

Big-Dollar Biometric Settlements Emboldening Plaintiffs Attorneys to Bring More Cases

By Alaina Lancaster

"I think we're just scratching the surface," Winston and Strawn partner Sean Wieber said of biometric privacy lawsuits.

7 minute read

February 23, 2023 | Analysis

Layoffs Likely to Increase Tech Industry's Cybersecurity Risks on Two Fronts

After Trial by Fire, Robinhood Legal Chief Knows Keys to Getting Along With SEC

"When you go through any kind of transition as an organization, it creates both operational, and emotional upheaval," said Mark Sangster, chief of strategy at Adlumin.

3 minute read

February 15, 2023 | News

Emergence of Metaverse Will Make Children's Privacy Landscape Even More Perilous

"The SEC is a black box to so many companies. It's sort of mysterious and episodic, and usually the episodes aren't positive ones," said Robinhood's Dan Gallagher, himself a former SEC commissioner.

5 minute read

February 15, 2023

Law Lags Technology as Delivery-Drone Services Take Flight

Tech companies already are grappling with stepped-up enforcement of existing child privacy rules and proposed legislation at the state and federal level that would further restrict what's permissible.

5 minute read

February 15, 2023

AI Regulation Is Picking Up Steam in State Legislatures

"While the principle of aerial trespass has existed for decades, few—if any—courts have wrestled with how to apply it to drones," according to a report from the U.S. Chamber of Commerce Institute for Legal Reform.

7 minute read

August 24, 2023 | Analysis

Regulators and Plaintiffs Lawyers Are Targeting 'Tech Bro Culture.' Is Your Company Next?

"It is taking over our lives, whether we know it or not," said Rebecca Bauer-Kahan, a member of the California State Assembly. "How do we ensure decisions are being made that are not discriminatory?"

6 minute read

February 08, 2023 | Analysis

By Colleen Murphy

"I think that tech companies have been booming for a number of years, and it's only natural that legal issues are going to come to the fore," said Shannon Liss-Riordan, a partner at Lichten & Liss-Riordan.

5 minute read

February 08, 2023 | Analysis

In Amicus Briefs, Tech Heavyweights Say Weakening Section 230 Would Be Calamitous

A More Perfect Union?: How Tech Workers' Collective Action Could Increase in 2023

Microsoft said that, if websites are no longer able to rely on algorithms, "the internet would devolve into a disorganized collection of haphazardly assembled information that would be impossible to navigate."

5 minute read

February 08, 2023 | Analysis

Could ChatGPT Soon Find Itself in Data Privacy Regulators' Crosshairs?

"Unionization is hitting where millennials are working, as a generalization," said Matt Austin, an employer-side attorney at Austin Legal in Columbus, Ohio.

6 minute read

February 01, 2023 | Analysis

Is Apple CEO's Pay Cut a Turning Point for Executive Compensation?

For now, ChatGPT users aren't given the option to consent to the use of their personal information, nor the opportunity to delete that data.

4 minute read

February 01, 2023 | Analysis

ChatGPT Might Simplify Life for In-House Counsel—While Also Creating New Risks

The tech giant cut Tim Cook's target pay by 40% to be "responsive to shareholder feedback," as reflected by the growing number of "no" votes on its "say-on-pay" proposal. Other companies are feeling similar pressure.

5 minute read

February 02, 2023 | Analysis

Cloud Software Is Supposed to Reduce Hassles, but Integration Headaches Often Loom

Goodwin Procter partner Martin Gomez said ChatGPT can be useful for questions for which there are black-and-white answers, but in-house counsel are often faced with the opposite. "So much of being a lawyer is operating in the gray and making judgment calls," he said.

6 minute read

February 01, 2023 | Analysis

Live Nation Antitrust Showdown May Accelerate Attacks Against Big Tech

"Because the legal tech market is growing so much, not all vendors are on the same maturity curve," said Mark Yacano, a managing director at Major, Lindsey and Africa.

3 minute read

January 26, 2023 | Analysis

Will Noncompete Ban Pave Way for Similar Assault on NDAs?

"The hearing has the effect of providing encouragement to the Department of Justice to do something," said William Kovacic, a professor at the George Washington University Law School and former Federal Trade Commission chairman.

4 minute read

January 25, 2023 | Analysis

Boards' Lack of Tech Savvy Poses Challenges for CLOs

"From a regulatory perspective it's a logical extension of the restrictions ... that the federal government is enacting," said Stephen Piepgrass, a partner at Troutman Pepper.

5 minute read

January 24, 2023 | Analysis

New Rules for Chinese Data Transfers Cause Headaches For US Firms

"The lawyers in our survey gave remarkably consistent comments. ... They see the key risk as the board. They worry over its composition, quality and experience," Baker McKenzie wrote in a recently released report.

7 minute read

August 17, 2023 | Analysis

Litigators' Advice to Companies on FTC Non-Compete Ban

Some companies are reacting by pulling or spinning off their Chinese operations, while even Chinese officials themselves are working to help U.S. companies navigate the regulations.

5 minute read

January 18, 2023 | Analysis

Activists' Shareholder Proposals Are Seeking Ever-Greater Detail on ESG Efforts

"The employees who really should have non-compete restrictions are those who have the keys to the kingdom, or who know the secret sauce," said Becky Baker, a Vinson and Elkins partner.

4 minute read

January 18, 2023 | Analysis

'There Are Headaches Galore': 3 Risk Areas That Will Reign in 2023

Proposals in the pipeline deal with a broad range of topics, including hate speech, reproductive rights and pay equity.

6 minute read

January 11, 2023 | Analysis

Securing Employee Data: What Happens When Hundreds Leave at the Same Time?

"2023 will be a momentous competition law year," said William Kovacic, a former FTC chairman.

6 minute read

January 18, 2023 | Analysis

Barrage of New Laws, Regulations Coming in 2023

"It's going to be challenging either way when you have a lot of departures, but if you thought about it in advance and prepared in advance, it can be a lot more manageable," said David Cohen, chair of the records and e-discovery group at Reed Smith.

3 minute read

January 11, 2023 | Analysis