Written by: Haim Ravia, Dotan Hammer
As 2026 begins, several significant legislative developments are reshaping the legal landscape governing artificial intelligence, digital identity, and data protection across the United States and European Union.
New York enacts AI transparency requirements for advertising.
Governor Hochul signed two related bills addressing synthetic media and digital replicas in commercial contexts. Senate Bill S8420A requires advertisers to conspicuously disclose when advertisements contain “synthetic performers” – digitally created assets generated using AI or software algorithms intended to create the impression of a human performer who is not recognizable as any identifiable natural person. Violations carry civil penalties of $1,000 for first offenses and $5,000 for subsequent violations. The law exempts audio-only advertisements, AI-powered language translation, and promotional materials for expressive works where synthetic performer use is consistent with the underlying work. The law takes effect 180 days after the Governor’s approval, placing it in mid-2026.
Senate Bill S8391 strengthens New York’s right of publicity protections for deceased performers in the AI era. The law expands the definition of “digital replica” to encompass highly realistic computer-generated representations readily identifiable as an individual’s voice or visual likeness, including cases where the fundamental character of an actual performance has been materially altered. Critically, the law now requires prior consent from a deceased performer’s heirs before using their digital replica in audiovisual works, sound recordings, or live musical performances—replacing the previous framework that merely required disclaimers. Platforms displaying such works must remove unauthorized content upon receiving good-faith notice from rights holders.
California regulates companion AI chatbots.
Effective January 1, 2026, California is imposing comprehensive safety requirements on AI companion chatbots under Senate Bill 243. The law targets AI systems providing adaptive, human-like social interactions. Operators must clearly disclose when users could reasonably be misled into believing they are communicating with humans. For minor users, operators face heightened obligations, including regular reminders about the AI’s artificial nature and measures preventing sexually explicit content. The law mandates protocols for detecting and responding to suicidal ideation, requiring operators to provide crisis service referrals when such content is detected. Beginning July 1, 2027, operators must annually report to the Office of Suicide Prevention on protocols addressing user self-harm. The law provides a private right of action for individuals injured by noncompliance.
Federal executive order challenges state AI laws.
On December 11, 2025, President Trump signed an executive order establishing federal policy to preempt state AI regulations deemed to obstruct national competitiveness. The order directs the Attorney General to establish an AI Litigation Task Force to challenge state laws on grounds including unconstitutional regulation of interstate commerce. The Secretary of Commerce must evaluate existing state AI laws within 90 days, identifying those requiring AI models to alter truthful outputs or compelling disclosures that potentially violate the First Amendment. The order conditions certain federal funding on states not enacting conflicting AI laws and directs the FTC to issue guidance on when state laws mandating alterations to AI outputs are preempted by federal prohibitions on deceptive practices. The order explicitly preserves state authority over child safety protections, AI infrastructure permitting, and government procurement.
European biotech act streamlines health technology regulation.
The European Commission proposed the European Biotech Act, which includes targeted amendments affecting personal data processing in health biotechnology contexts. Most significantly, the proposal amends the Clinical Trials Regulation to harmonize the legal basis for processing personal data in clinical trials across Member States, addressing current inconsistencies in how national authorities interpret GDPR requirements in clinical research settings. This harmonization aims to reduce fragmentation that stakeholders identified as creating compliance challenges, particularly where clinical trial rules intersect with GDPR, the Medical Devices Regulation, and REACH.
Click here to read New York Senate Bill S8420A regarding “synthetic performers”.
Click here to read New York Senate Bill S8391 regarding a digital replica of deceased performers.
Click here to read California Senate Bill AI 243 on companion chatbots.
Click here to read President Trump’s Executive Order on preempting state AI regulations.
Click here to read the proposed European Biotech Act.
