Insights

The landscape of counterfeiting litigation is shifting in ways that place online marketplace operators at the center of disputes from two directions. Brand owners are escalating efforts to hold platforms liable for counterfeit goods sold through their sites, while some marketplace operators have begun joining brand owners as co-plaintiffs to pursue counterfeiters directly. This dual role has significant implications for how platforms manage their legal exposure and their relationships with brand owners.

Meta continues to face lawsuits around the country alleging that its platforms are designed to induce compulsive use by children. In March 2026, a California jury delivered a landmark verdict that Meta and YouTube were liable for allegedly addictive platform features that resulted in a child’s mental health distress.  

On Friday, April 10, 2026, the U.S. Department of Justice (DOJ) announced that International Business Machines Corporation (IBM) has agreed to pay just over $17 million to resolve allegations that it violated the False Claims Act (FCA) by failing to comply with federal anti-discrimination requirements incorporated into its federal contracts due to allegedly discriminatory diversity, equity, and inclusion (DEI) employment practices. This resolution marks the first FCA settlement secured by the DOJ under its Civil Rights Fraud Initiative, created in May 2025, and announced by then-Deputy Attorney General Todd Blanche as part of the administration’s coordinated efforts to target allegedly unlawful DEI practices. Per the agreement, the settlement is neither an admission of liability by IBM nor a concession by the United States that its claims are not well founded.

Last month, in a ruling that may carry significant implications for the artificial intelligence industry, a California federal court held that state tort and contract claims related to the training of AI models were not preempted by federal law and could proceed in state court. Because many AI models were trained in a similar fashion---by scraping data from online posts and repositories---the decision suggests other plaintiffs may bring such claims in state courts, in addition to federal claims of copyright infringement.

On March 25, 2026, in Cox Communications, Inc. v. Sony Music Entertainment, the U.S. Supreme Court reversed a $1 billion verdict against Cox. The judgment was the result of a jury trial in which Sony claimed that Cox was liable for contributory copyright infringement because it knew that its customers were using its service to infringe yet did not respond with sufficient diligence to prevent that infringement.

On March 26, 2026, President Trump issued an executive order (EO) titled Addressing DEI Discrimination by Federal Contractors. The EO declares diversity, equity, and inclusion (DEI) “activities” “unethical and often illegal,” and imposes new obligations on federal contractors and subcontractors related to DEI programming. Contractors that do business with the federal government — or that work as subcontractors for companies that do — should review the EO closely to determine the extent to which they are compliant with the new requirements.

In two recent pathbreaking judgments, juries in California and New Mexico held social media companies civilly liable for harming minors who used their products.

The Supreme Court has concluded that the International Emergency Economic Powers Act (IEEPA) does not authorize President Trump to impose tariffs.  For a detailed analysis of the decision, please see our Trade Group’s full alert.

2026 will be a significant year for retailers and e-commerce companies, with significant changes on the horizon that will affect the entire industry and ecosystem. Potential headwinds and developments in product safety, pricing, artificial intelligence, data privacy, website compliance, and environmental responsibility are expected. But amidst these changes, there are likely significant opportunities that retail and e-commerce businesses can capitalize on.

California continues its blistering pace in enacting artificial intelligence regulations. In 2024 alone, California enacted 18 AI-related bills seeking to regulate AI tools and increase transparency around AI data disclosure.

In Cox v. Sony, the US Supreme Court granted certiorari and will hear oral arguments this term. Cox seeks to overturn a decision by the US Court of Appeals for the Fourth Circuit that affirmed a billion-dollar judgment against Cox after a jury concluded that Cox was liable for contributory copyright infringement based on its users’ direct copyright infringement.

On September 9, 2025, the Ninth Circuit Court of Appeals affirmed a district court’s denial of a preliminary injunction as to certain provisions of California’s Protecting Our Kids from Social Media Addiction Act. This interlocutory ruling is significant for two reasons. First, it demonstrates why and how state laws can withstand and avoid First Amendment challenges. Second, it showcases the potential difficulties in establishing associational standing on behalf of member technology and digital commerce companies.

The Really Simple Licensing Collective (“RSL Collective”), a nonprofit dedicated to creating collective licensing solutions for content creators and publishers, has announced Really Simple Licensing (“RSL”), a new standard designed to stop crawlers from scraping websites for content without permission or compensation. If adopted, RSL could have major implications for both online platforms and the AI technologies that source content for training data from them.

Twenty years ago, the Supreme Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 919 (2005). In the Grokster case, the Supreme Court found that peer-to-peer file sharing companies could be liable for copyright infringement for their users’ deployment of file sharing software. There, the Court found that liability was warranted because the file sharing companies knew that its users were infringing, and the companies materially contributed to that infringement.

Section 230 of the Communications Decency Act of 1996 has been credited with “creating” the internet by immunizing websites and platforms from lawsuits arising from the content posted by third-party users. Specifically, an internet company is not liable for publishing or posting content drafted by another person under conventional common law tort theories such as defamation or slander, however loathsome, violent or otherwise hateful that content is.  At the same time, Section 230 also immunizes a website or platform that engages in good-faith moderation of content it deems to violate its terms of use/conditions or community standards. 

Last week, artificial intelligence companies won two significant copyright infringement lawsuits brought by copyright holders, marking an important milestone in the development of the law around AI. These decisions – Bartz v. Anthropic and Kadrey v. Meta (decided on June 23 and 25, 2025, respectively), along with a February 2025 decision in Thomson Reuters v. ROSS Intelligence – suggest that AI companies have plausible defenses to the intellectual property claims that have dogged them since generative AI technologies became widely available several years ago. Whether AI companies can, in all cases, successfully assert that their use of copyrighted content is “fair” will depend on their circumstances and further development of the law by the courts and Congress.

On April 3, 2025, the United States Department of Justice’ Antitrust Division hosted a forum on “Big-Tech Censorship” in which key Trump Administration Officials announced their desire to reform, or entirely overhaul, Section 230 of the Communications Decency Act. In March 2025, we wrote about the Federal Trade Commission’s (FTC) inquiry into “tech censorship” and its associated request for public comments from those who “may have been harmed by technology platforms that limited their ability to share ideas or affiliations freely and openly.” That RFI remains open, and its deadline is May 21, 2025.

On February 20, 2025, the Federal Trade Commission launched an “inquiry” into “tech censorship” by calling for public comments from those who “may have been harmed by technology platforms that limited their ability to share ideas or affiliations freely and openly.” The deadline for comments is May 21, 2025.

On February 4, 2025, California Assemblywoman Rebecca Bauer-Kahan introduced AB 412, titled the AI Copyright Transparency Act (the “Act”), which is aimed at increasing greater transparency when copyrighted materials are used as training data for Generative AI (“GenAI”) models and systems. If passed, the Act would require developers who use copyrighted materials as part of their training dataset to disclose this use to the copyright owners.

On Sunday, September 29, 2024, California Gov. Gavin Newsom vetoed SB 1047, a bill to enact the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act. Although the bill passed the California Assembly and Senate, it generated significant controversy and debate within the tech community. The Center for AI Safety, Elon Musk, the L.A. Times editorial board, and San Francisco-based AI startup Anthropic all supported the bill; while Meta, OpenAI, and House Speaker Nancy Pelosi opposed it as hindering innovation.