Legal Developments in the U.S. and EU, Growing Concerns with Generative AI, Chargeback Challenges, and EU Commission’s Designation of Under DSA

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This week’s Update features a number of important legal updates – both in the U.S. and in the EU.  The next 6-9 months should prove to be interesting as the EU moves forward with the implementation of its new digital legal framework – the Digital Services Act (DSA) and Digital Markets Act (DMA).  I hope you enjoy.

  • FTC Identifies Possible Competition Concerns with Generative AI.  This past week, the FTC published a blog post detailing its view of potential competition concerns with generative AI.  Key building blocks identified by the FTC for the successful use and implementation of generative AI (and all favoring large industry incumbents over new industry participants) include (1) data, (2) talent and (3) computational resources.  Identified areas of concerns include a number of “industry standards” seen with prior emerging technologies – control of critical inputs, bundling and tying of products and services and exclusive dealing.  Here we go again.
  • First Fraud, Now Chargebacks.  Having heard firsthand this past week while at HSMAI’s events in Toronto of hoteliers’ growing frustration with chargebacks, I wasn’t surprised by the results of Outpayce’s (Amadeus payments business) recent survey of travel executives, which, among other things, detailed the travel industry’s growing chargeback challenge.  According to the survey, over two thirds (71%) of the respondents have seen an increase in chargebacks with 33% experiencing a growing number of chargeback disputes over the past year.  According to the survey, respondents attributed the increase to a number of factors – (1) consumers view that the chargeback process is easier (thanks in part to mobile banking apps) than refunds and (2) consumers’ increased awareness of chargebacks generally. 
  • Designated a “Very Large Online Platform” Under DSA.   As many wait to learn’s fate under the DMA (i.e., whether will be designated a “Gatekeeper”), it is important to remember that has already been designated a “Very Large Online Platform” (VLOP) under the DSA.  Back in April of this year, the EU Commission announced its decision that satisfied the 45 million monthly active user threshold to be designated a VLOP.  Why is this important?  First,’s designation as a VLOP may be a telltale sign of its pending gatekeeper designation.  Second, recent events may provide some indication as to how might challenge (and ultimately delay) its VLOP designation or possible future gatekeeper designation.  Late last month, German online retailer Zalando, also a recent VLOP designee, filed suit appealing its designation, arguing that its unique hybrid model (combining both retail and platform businesses) caused it to fall well below the 45 million user threshold.  What effect Zalando’s claims might have on its designation or its eventual compliance with the many VLOP content requirements is unclear, but we may soon see other designees – – following Zalando’s example.
Greg Duff

Greg Duff is a Principal at Foster Garvey. Greg is Chair of the firm's national Hospitality, Travel and Tourism practice, which is directed at the variety of matters faced by hospitality and travel industry members, including purchase and sales agreements, management agreements, sales and marketing, distribution, privacy and data security, procurement and technology. Throughout Greg’s 25+ year career working in the hospitality industry, he has dedicated himself to helping clients solve the range of legal issues associated with operating a modern hospitality operation – from negotiating management and other operational agreements to advising on the myriad of issues associated with sales distribution and online travel.

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