Client updates /  AI Regulation

The European Parliament has announced that agreement has been reached on the Digital Omnibus proposal for changes in the EU AI Act. Although still subject to completion of the formal legislative process, these changes represent a significant regulatory development and provide greater clarity as to the direction of EU AI legislation.

On April 15, 2026, the Israel Medical Association’s Ethics Department published a position paper outlining guidelines for the use of artificial intelligence in the healthcare system. Although the position paper addresses physicians and medical institutions, in practice, it has significant implications for healthtech and medtech companies. Since medical institutions will be required to align their activities with these principles, it is reasonable to assume this will directly impact their demands on technology providers.

Following an extensive public consultation process, a final report on the use of AI in the financial sector was published last week. The report was prepared by a committee comprising representatives of the Ministry of Justice, the Ministry of Finance, the Competition Authority, the Israel Securities Authority, the Capital Market, Insurance and Savings Authority, and the Bank of Israel.

The European Commission recently published the Digital Omnibus, aimed at simplifying data regulation within the European Union by amending key legislation governing digital data. In this update, we summarize the proposal’s key aspects.

The Israeli Money Laundering and Terrorist Financing Prohibition Authority (IMPA) published a document recently to raise awareness of the new challenges abuses of Generative AI and Deepfake pose to the financial sector. The document reviews the potential risks of use of these technologies, presents case studies from Israel and around the world, discusses emerging threats, and provides a list of “red flags” to help identify suspicious activities.

A significant development occurred last week at the interface between artificial intelligence and intellectual property following the settlement agreement reached by Anthropic in the class action lawsuit filed against it with the US District Court for the Northern District of California.

Amendment 13 to the Israeli Privacy Protection Law is expected to come into effect in mid-August 2025. The amendment prescribes, inter alia, organizations’ obligation to appoint a data protection officer. The Privacy Protection Authority recently published a draft directive on implementing this obligation. The draft is not final and is open for public comments.

At the end of June 2025, the Northern California District Court issued two precedent-setting rulings addressing the legal question: Is it lawful to use copyrighted works for machine training of AI-based large language models (LLMs)?

Earlier this month, the US Senate voted 99-1 to strike a key clause in a sweeping Republican domestic policy bill that sought to impose a ten-year moratorium on states’ enforcement of artificial intelligence regulations.

The Israeli Privacy Protection Authority (PPA) published a draft directive recently to clarify its position about how businesses and organizations should apply the provisions of the Privacy Protection Law and the privacy regulations to artificial intelligence systems.