DROPLETS

The European Commission on September 3, 2026, adopted its first-ever substantive guidelines on exclusionary abuses under Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position. This is a landmark development, as the new guidelines consolidate and clarify the Commission's analytical framework and enforcement priorities for conduct such as predatory pricing, exclusive dealing, and loyalty rebates.

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The Securities and Exchange Commission on September 3, 2026, issued a proposal to rescind Rule 206(4)-5 under the Investment Advisers Act, commonly known as the "pay-to-play" rule. The rule, adopted in 2010, was designed to prevent corruption and undue influence by prohibiting investment advisers from receiving compensation from a government entity for two years after the adviser or certain executives or employees make a political contribution to an official of that entity.

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The European Commission has formally adopted new Guidelines detailing its framework for assessing exclusionary abuses of dominance under Article 102 of the Treaty on the Functioning of the European Union (TFEU). This represents the first comprehensive guidance on the topic, clarifying the Commission's enforcement priorities and analytical approach for a range of conduct, including predatory pricing, exclusive dealing, tying, and refusal to supply.

For dominant companies and their counsel, these Guidelines are essential reading. They establish a more structured effects-based analysis, providing greater legal certainty for firms assessing whether their commercial practices could be deemed anticompetitive. The framework will be highly influential in proceedings before the Commission and national competition authorities, as well as in litigation before EU and national courts.

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A new guide addresses the growing challenge of complying with a divergent patchwork of state-level artificial intelligence regulations in the United States. In the absence of a comprehensive federal framework, states are independently enacting laws governing the development and deployment of AI technologies. This fragmentation creates significant legal and operational hurdles for companies operating nationwide, which must now track and adhere to varied requirements related to algorithmic bias, transparency, data privacy, and consumer disclosures. For sophisticated clients, this landscape increases compliance costs and legal risks, demanding a proactive and multi-jurisdictional approach to AI governance. The key takeaway for counsel is the need to continuously monitor this evolving regulatory map to ensure their organization's AI systems and policies are compliant in every state of operation. Meanwhile, the legal community continues to watch for any movement toward a federal AI law that could potentially preempt and harmonize these disparate state-level efforts.

Germany's Federal Labor Court has invalidated a standard German choice-of-law clause in the contract of an employee working permanently from home in the Netherlands. The court held the clause was insufficiently transparent because it failed to disclose that, under the EU’s Rome I Regulation, the employee retains all mandatory protections of the law where they habitually work.

The ruling has immediate, practical consequences for employers with cross-border remote staff. Because the clause was void, the court applied Dutch law—the law of the employee’s location—to the entire relationship. The employer's termination notice, while compliant with German standards, was invalid under stricter Dutch labor laws that prohibit termination during an employee's sick leave and require prior government approval for operational dismissals. The decision serves as a stark warning that simplistic choice-of-law provisions are a significant liability. Companies with employees working remotely from another EU country must now urgently review and likely redraft their employment agreements to explicitly ac

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On September 1, 2026, the Patent Trial and Appeal Board (PTAB) issued a final written decision in a post-grant review finding all challenged claims of Halozyme's U.S. Patent No. 12,110,520 unpatentable. The patent covers aspects of the company's PH20 hyaluronidase enzyme technology, which facilitates the subcutaneous delivery of biologics and is used in a version of Merck’s cancer drug Keytruda.

This ruling is a significant development for pharmaceutical and biotech companies, as it could clear a path for competitors to develop and market products using similar drug-delivery systems without infringing this specific patent. For innovative drug companies, the decision underscores the vulnerability of issued patents to PTAB challenges, which have become a common tool for alleged infringers and competitors. Counsel for clients in the life sciences sector should note this outcome’s potential to alter the competitive landscape for biologic drug formulations. The next step to watch is a potential appeal of the PTAB’s decision by Halozyme to the U.S. Court of Appeals for the Federal Circuit

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In Dodiya v. Franklin, the Delaware Court of Chancery provided an updated analysis of Section 144 of the Delaware General Corporation Law, which offers a "safe harbor" to protect conflicted-director transactions from the exacting entire-fairness standard of review. This decision serves as a significant cautionary tale for boards and their counsel, demonstrating that mere technical compliance with the statute may not be sufficient to secure its protections. The court focused on the board's failure to safeguard confidential company information from the conflicted directors, finding that this procedural flaw could undermine the integrity of the approval process by disinterested directors.

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On September 9, 2026, the European Union's General Court dismissed Booking Holdings Inc.’s challenge to the European Commission’s prohibition of its proposed acquisition of flight-booking platform Etraveli Group. The ruling validates the Commission's increasingly assertive merger-enforcement policy, particularly regarding dominant digital platforms acquiring smaller players in adjacent markets.

Sophisticated counsel and clients in the technology and M&A spaces care because the decision strengthens the EC’s hand in blocking "killer acquisitions" or deals that risk entrenching a platform's dominant ecosystem. The court’s acceptance of the regulator's theory of harm, even where the immediate market-share accretion may appear small, signals a high and potentially unpredictable bar for future platform deals in Europe. The ruling underscores the need for M&A advisors to account for significant regulatory risk in such transactions.

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The Securities and Exchange Commission on September 3, 2026, issued a proposal to rescind Rule 206(4)-5 of the Investment Advisers Act, the federal “pay-to-play” rule. The rule currently prohibits investment advisers from receiving compensation for advisory services from a government entity for two years after the adviser or certain executives or employees make a political contribution to an official of that entity. The proposed rescission signals a significant potential change in the regulatory landscape for asset managers who interact with public pension plans and other government clients. While the move could reduce certain specific compliance burdens, advisers should note that other state and local pay-to-play restrictions may still apply. Furthermore, conduct previously covered by the rule could still raise concerns under general anti-fraud provisions. Firms should monitor the rulemaking process and consider submitting public comments.

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a final rule, published August 21, 2026, that substantially alters affirmative action obligations for federal contractors regarding individuals with disabilities. The rule eliminates two key requirements under Section 503 of the Rehabilitation Act: the mandate for contractors to invite applicants and employees to self-identify as having a disability and the aspirational 7% utilization goal for employing individuals with disabilities in each job group.

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In R v Osmond, the UK Court of Appeal has issued its first-ever judgment on the 'tipping off' offence under the Proceeds of Crime Act 2002 (POCA), upholding the conviction of a solicitor for informing a client about an SFO money laundering inquiry. This ruling provides critical guidance for all regulated firms, confirming the offence has a very broad scope.

The court established that disclosing a specific, non-public inquiry constitutes tipping off, even when it is part of a larger, publicly known investigation. It also affirmed that the offence is committed if a disclosure is merely likely to prejudice an investigation; the prosecution does not need to prove actual harm resulted. Crucially, the court found that information from an investigator is received 'in the course of business' based on the professional's capacity (e.g., as a solicitor), not its source. This decision highlights the serious risks for professionals and firms, especially given new laws extending corporate criminal liability for offences committed by senior managers. Firms should ensure robust internal escalat

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The U.S. Securities and Exchange Commission has issued an exemptive order impacting how general partners (GPs) structure and execute GP-led secondary transactions, particularly concerning the election periods for continuation vehicle (CV) funds. These transactions have become a critical tool for private equity sponsors seeking to provide liquidity to limited partners (LPs) and hold promising assets for longer, and the new order addresses key aspects of the process by which LPs choose whether to sell their interests or roll them into a new CV.

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In Acer Incorporated & Ors v Nokia Technologies Oy, the English Court of Appeal has endorsed arbitration as a suitable forum for resolving global disputes over the licensing of standard-essential patents (SEPs) on fair, reasonable, and non-discriminatory (FRAND) terms. The court affirmed that a SEP owner can compel an implementer to resolve the dispute via arbitration when that option is chosen by the patent holder. This decision solidifies London's role as a key venue for international patent litigation and offers a significant strategic alternative to complex, multi-jurisdictional court proceedings that have historically characterized these conflicts. For SEP holders, the ruling provides a potential path to a single, globally-binding resolution on FRAND rates, reducing cost and uncertainty. For technology implementers, it may limit their ability to challenge patents or negotiate licenses in other preferred jurisdictions. Parties involved in SEP licensing should now reassess their dispute resolution strategies and consider the increased likelihood of being compelled into global FRAN

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A major law firm has issued guidance advising corporate boards to prepare for a potential increase in congressional investigations following the next election cycle. The firm suggests that a shift in political control in either the House or the Senate could lead to heightened scrutiny of corporations, noting that Democrats have already signaled their likely areas of investigative focus.

Congressional inquiries can pose significant legal, financial, and reputational risks. Proactive preparation allows companies to develop a response strategy, identify potential vulnerabilities, preserve relevant documents, and prepare key personnel for testimony, mitigating disruption and potential liability. This is particularly critical for companies in highly regulated sectors or those that have been the subject of recent public or political debate.

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New York Attorney General Letitia James has released final rules to implement the Stop Addictive Feeds Exploitation (SAFE) for Kids Act. The law, signed in 2024, imposes new obligations on operators of websites and online services that use algorithmic feeds to serve content. Its effective date was triggered by this finalization, making compliance an immediate concern.

The SAFE for Kids Act is a significant development for major technology and media clients, as it directly regulates the design of core product features to protect users under 18. It joins a growing wave of state-level legislation aimed at protecting minors from perceived online harms, creating a complex compliance patchwork for companies operating nationwide. Counsel should advise clients to review their age-gating mechanisms and content-delivery algorithms for New York users. The industry will be closely watching for legal challenges to the new rules and for similar legislative proposals in other states.

The European Union is advancing its 'Critical Medicines Act,' an ambitious legislative effort designed to address persistent shortages of essential pharmaceuticals. The Act aims to bolster the security and sustainability of the region’s drug supply by incentivizing EU-based manufacturing. For global pharmaceutical and life sciences companies, this represents a significant policy shift in one of the world's largest markets. The initiative could reshape supply-chain strategies, requiring companies that rely on non-EU manufacturing to re-evaluate their operations to and within the bloc. The legislation may introduce new procurement preferences for local producers or create other regulatory hurdles for imported medicines. Counsel for affected clients should closely monitor the Act’s development to anticipate specific incentives and requirements, as these will likely influence future investment decisions and alter the competitive landscape for medicines deemed critical to the EU.

With a new US Congress on the horizon, corporate counsel are being warned to prepare for a potential increase in government oversight and investigations. This forward-looking analysis suggests that companies should anticipate a complex environment where congressional probes may intersect with other legal and regulatory risks, creating multifaceted challenges. For sophisticated clients and their advisors, these investigations represent significant legal, financial, and reputational threats. Proactively developing a response strategy is crucial for mitigating potential damage, protecting privileged information, and managing the narrative. The key action for companies is to begin assessing their potential vulnerabilities and legal arguments now, before any specific inquiries are launched. The developments to watch will be the stated priorities of key congressional committees and the initial targets of their oversight activities once the new session convenes. Preparation today can significantly influence outcomes tomorrow.

The U.S. Securities and Exchange Commission (SEC) and the Food and Drug Administration (FDA) have formalized a partnership to share information, signaling a new era of coordinated regulatory oversight for public companies in FDA-regulated industries. Under a new memorandum of understanding (MOU), the SEC can now request and use nonpublic information from the FDA to review company filings and support enforcement investigations into potential securities law violations.

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US financial regulators have formally approved the use of verifiable digital credentials for customer identification. In a joint statement on September 8, 2026, the Financial Crimes Enforcement Network (FinCEN), the Federal Reserve, the FDIC, and the NCUA clarified that banks and other financial institutions may incorporate this technology into their Customer Identification Programs (CIPs) to comply with the Bank Secrecy Act. This development provides long-awaited regulatory certainty for institutions seeking to modernize their onboarding and verification processes. By using secure and verifiable digital IDs, firms can potentially reduce the risk of identity fraud, streamline customer onboarding, and create more efficient compliance workflows. The regulators' endorsement signals a significant step toward embracing technology to enhance anti-money laundering and know-your-customer controls. Counsel for financial institutions should now assess the opportunities and risks of adopting digital credentialing systems and watch for any follow-on technical guidance from the agencies concernin

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The European Union's AI Act introduces a new layer of regulation for companies that develop or deploy artificial intelligence systems within the bloc. This guide explains the significant overlap between the AI Act's requirements and the existing General Data Protection Regulation (GDPR), particularly where AI models are trained using personal data. Companies with robust GDPR compliance programs may already have a strong foundation for meeting the AI Act's data-governance mandates.

Sophisticated counsel and their clients care because navigating the dual requirements of these landmark regulations is essential for lawful operation in the EU market. Failure to comply can result in substantial fines and reputational damage. Leveraging existing GDPR frameworks for AI Act compliance can create significant efficiencies and reduce legal risk. The immediate action for affected companies is to audit their data governance policies, especially those concerning data quality, purpose limitation, and transparency, to identify gaps in their ability to satisfy the specific demands of the AI Act.

The UK government has reportedly accelerated the implementation timeline for new consumer protection rules governing subscription contracts under the recently enacted Digital Markets, Competition and Consumers Act (DMCCA). This development shortens the preparation window for companies selling to consumers in the UK. Sophisticated counsel and their clients care because a vast number of businesses across technology, media, and retail sectors rely on recurring revenue models. The DMCCA introduces stringent requirements for transparency in pre-contract information, mandates clear renewal reminders, and simplifies cancellation processes. Failure to comply with these standards on the new, faster schedule exposes businesses to heightened risks of regulatory investigation, potential fines, and consumer-led legal challenges. Affected companies should immediately reassess their compliance roadmaps and prioritize auditing their customer journeys—from sign-up to cancellation—to ensure their processes and disclosures align with the incoming rules on the revised timetable.

The U.S. Departments of Labor, Health and Human Services, and the Treasury have collectively adopted a non-enforcement position regarding the final regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA) issued in fall 2024. This development provides employers and group health plans with temporary relief from complying with the specific requirements of the new final rule.

Sophisticated counsel should recognize that this enforcement pause is narrow and does not affect the underlying statutory mandates of the MHPAEA or previously established guidance. The agencies have indicated that they have not forgotten about mental health parity, signaling that investigations and enforcement actions under existing law will continue. Clients who interpret this announcement as a broad suspension of all parity obligations risk significant compliance failures and potential liability.

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On September 9, 2026, the European Union's General Court upheld the European Commission's 2023 decision to block Booking Holdings' proposed acquisition of Etraveli. The judgment is a significant victory for the Commission, as it validates the regulator's use of the controversial 'ecosystems theory of harm' in merger control.

Sophisticated counsel should note that this theory allows regulators to block deals that could entrench a dominant market position by expanding a company's network of interconnected services, even where the transaction does not involve direct competitors. The court's endorsement creates significant new hurdles and uncertainty for M&A activity, particularly for digital platforms seeking to grow by acquiring complementary services. The decision requires dealmakers to analyze not just traditional horizontal or vertical overlaps, but also how a target might strengthen a buyer's broader 'ecosystem.'

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New York has enacted two laws creating new compliance duties for employers. The first, effective Nov. 8, 2026, grants current and former employees broad rights to access and obtain copies of their personnel records within five business days of a written request. Employers must also notify employees within 10 days of placing any "negative information" in their file—a vaguely defined term that creates significant compliance risk. A second law, the Construction Reporting Pay Act, takes effect Dec. 8, 2026, and mandates show-up and scheduling pay for construction workers who report for shifts that are cancelled on short notice.

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Spain and Portugal have published draft legislation to transpose the EU Pay Transparency Directive into their national laws, in some cases proposing stricter requirements than the directive mandates. Both countries plan to extend mandatory pay-gap reporting to employers with 50 or more workers, a significantly lower threshold than the EU's 100-employee baseline.

Counsel for multinational employers should note this "gold-plating." The Spanish draft, for instance, would require employers to implement corrective measures for unjustified pay disparities within six months of a report identifying them. The Portuguese draft introduces a powerful presumption that any dismissal or disciplinary action within three years of an equal-pay complaint is abusive, placing a heavy burden on the employer to prove otherwise.

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On September 2, 2026, five U.S. financial regulators—the Federal Reserve, FDIC, NCUA, OCC, and FinCEN—issued a joint statement clarifying the confidentiality rules surrounding Suspicious Activity Reports (SARs). The guidance focuses on how financial institutions can communicate with customers about accounts or transactions that may be the subject of a SAR filing without unlawfully disclosing confidential information.

Violating SAR confidentiality can result in severe civil and criminal penalties for both institutions and individuals. This creates a difficult challenge for banks, which must manage customer relationships—including account closures or restrictions—while adhering to the strict prohibition on tipping off customers about SAR filings. The new interagency guidance provides a clearer framework for navigating these sensitive communications, aiming to reduce compliance risk and uncertainty.

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On August 26, 2026, the National Labor Relations Board's General Counsel, Crystal S. Carey, issued Memorandum GC 26-04, outlining her office's enforcement priorities. The memo provides a clear roadmap of established Board precedents the General Counsel now plans to ask the sitting Board to reconsider and overturn. This development is critical for employers and their counsel because it signals a significant potential shift in the application of federal labor law. The GC's agenda directly impacts core issues such as union organizing tactics, collective bargaining standards, and the legality of common workplace rules and policies. While the memo itself does not change the law, it serves as an authoritative preview of the arguments the GC’s office will advance in future litigation. Sophisticated counsel should analyze the targeted precedents and assess their clients' potential exposure under a new legal standard. The next development to watch will be the specific cases in which the GC begins to formally litigate these challenges.

The US Court of Appeals for the Eleventh Circuit has held that the qui tam provisions of the False Claims Act (FCA) do not violate the Constitution. This ruling addresses a growing line of defense arguments that the FCA improperly delegates executive enforcement authority to private citizens (relators) in violation of the Appointments Clause and the Take Care Clause. The decision preserves the government's primary tool for combating fraud in federal spending.

For counsel and clients in the healthcare, government contracting, and other federally-funded sectors, this decision reaffirms the significant risk posed by whistleblower-initiated FCA litigation within the Eleventh Circuit (covering Alabama, Florida, and Georgia). While defendants in other jurisdictions may continue to raise this constitutional challenge, the ruling creates a strong persuasive counterargument and contributes to a developing circuit split that could ultimately invite Supreme Court review. Companies should continue to maintain robust compliance programs to mitigate the underlying risk of an FCA claim.