EU Targets Kids’ Social Media, Arbitration Faces Scrutiny

The European Union is preparing new regulations targeting addictive design features on platforms like TikTok and Instagram, while scrutiny of forced arbitration clauses in consumer tech contracts intensifies in the United States — two parallel legal pressures reshaping how technology companies interact with users in 2026.

EU Moves Against Addictive Platform Design

The European Commission plans to introduce regulation specifically targeting “addictive design” features on social media platforms used by children, according to CNBC. European Commission President Ursula von der Leyen confirmed the regulation is expected later this year, making it one of the most targeted child-safety measures the bloc has proposed under its broader digital governance framework.

The move follows mounting pressure from governments worldwide to address platform features — infinite scroll, push notifications, autoplay — that critics argue are engineered to maximize engagement at the expense of younger users’ wellbeing. TikTok and Meta’s Instagram are the named targets, though the regulation’s scope is expected to apply broadly to major platforms operating in EU member states.

The EU already has the Digital Services Act in force, which requires large platforms to assess and mitigate systemic risks, including risks to minors. The forthcoming addictive design rules would add a more prescriptive layer on top of that framework, specifically constraining interface choices rather than just mandating risk reporting.

No draft text has been published yet, but von der Leyen’s public commitment signals the Commission intends to move before the end of 2026. Platforms found in violation of DSA obligations can face fines of up to 6% of global annual revenue, and any new child-safety rules are likely to carry comparable enforcement weight.

Forced Arbitration: The Legal Clause in Every Terms of Service

On the other side of the Atlantic, a quieter but equally consequential legal debate is playing out around forced arbitration — the clauses buried in terms of service agreements that strip consumers of the right to join class-action lawsuits.

Brendan Ballou, founder of the Public Integrity Project and author of When Companies Run the Courts, told The Verge that forced arbitration clauses are now standard in virtually every consumer product and digital service agreement. Under these clauses, users who accept terms of service — often without reading them — agree in advance to resolve any disputes through private arbitration rather than the court system.

The practical effect, Ballou argues, is that companies effectively operate their own parallel justice system. Arbitration proceedings are private, arbitrators are often selected by repeat-player corporations, and outcomes are rarely subject to meaningful appeal. Class-action suits, which historically allowed large numbers of consumers to pool claims too small to litigate individually, are foreclosed by design.

Several high-profile cases in recent years have drawn public attention to how these clauses function — and how courts have repeatedly upheld them, even when the underlying conduct was egregious. Federal legislative efforts to limit forced arbitration have stalled repeatedly in Congress, though the Consumer Financial Protection Bureau has taken administrative action in specific sectors.

In-House Legal Teams Adopt AI for Compliance

While regulators draft new rules and advocates push for legal reform, corporate legal departments are quietly deploying AI tools to manage the growing compliance burden — and some are doing it more aggressively than expected.

Westpac’s in-house legal team won an internal competition at the Australian bank in 2025 after pitching an AI tool that extracts information from incidents and compliance questions to identify trends and predict emerging risks, according to the Financial Times. The tool has since been funded and is in early implementation. Petra Stirling, director of operations, risk and transformation for Westpac legal, told the FT that “legal is one of the leading teams in terms of both volume of [AI] agents and the value that they deliver.”

Stirling noted that predictive analytics has not traditionally been part of in-house legal’s mandate — compliance teams typically respond to incidents rather than forecast them. The Westpac project represents a shift toward legal departments functioning as proactive risk sensors rather than reactive advisers.

The Westpac case is one of several highlighted in the 2026 FT Innovative Lawyers Asia-Pacific report, which documented legal teams across the region integrating AI into core workflows.

Law Firms Automate Regulatory Compliance Work

External law firms are moving in the same direction. According to the Financial Times’ Asia-Pacific Innovative Lawyers report, Australian firm Mallesons — recently demerged — received top marks for making AI integral to its legal practice delivery, earning scores of 9 out of 10 for both leadership and impact.

Mallesons has developed AI-supported processes for checking draft documents against term sheets, producing compliance reports, and streamlining merger notifications. The firm’s approach treats AI not as a research assistant but as a workflow component embedded in substantive legal tasks.

Other firms featured in the FT’s case studies are experimenting with AI for due diligence, contract review, and regulatory mapping — functions that are becoming more complex as jurisdictions like the EU layer new digital regulations on top of existing frameworks. The volume of compliance obligations created by the DSA, the EU AI Act (which began phased enforcement in 2024), and forthcoming child-safety rules is generating sustained demand for tools that can track and interpret regulatory requirements at scale.

For in-house teams at companies operating across multiple jurisdictions, the compliance surface is expanding faster than headcount can keep pace — making AI-assisted monitoring less a competitive advantage and more a practical necessity.

What This Means

The regulatory and legal developments across these sources point to a structural tightening of the rules governing how technology companies interact with users — and how disputes get resolved when things go wrong.

The EU’s planned crackdown on addictive design is notable for its specificity. Rather than requiring platforms to self-assess and report, it would constrain particular design choices — a more interventionist posture that, if adopted, could require product changes rather than just compliance documentation. Platforms have historically adapted to EU rules by creating region-specific versions of their products; that approach may become harder to sustain as the rules become more prescriptive.

The forced arbitration debate in the US reflects a different kind of legal asymmetry. Where the EU is adding consumer protections, American consumers are losing access to collective legal remedies through contractual mechanisms that courts have consistently enforced. Ballou’s book arrives at a moment when there is renewed public awareness of the issue but no clear legislative path to reform.

For legal departments and law firms, the AI adoption trend is accelerating precisely because the regulatory environment is becoming more complex. The irony is that the same companies facing stricter rules are deploying AI to manage compliance with those rules more efficiently — reducing the friction of regulation without necessarily changing underlying behavior.

Taken together, these developments suggest that 2026 is a year of legal infrastructure-building: regulators writing new rules, advocates exposing old ones, and companies building the operational capacity to navigate both.

FAQ

What is the EU’s planned regulation on addictive social media design?

The European Commission plans to introduce rules specifically targeting design features on platforms like TikTok and Instagram that critics say are engineered to maximize engagement among children. European Commission President Ursula von der Leyen said the regulation is expected later in 2026, building on existing obligations under the Digital Services Act.

What is forced arbitration and why does it matter for tech users?

Forced arbitration clauses, embedded in most consumer terms of service agreements, require users to resolve disputes through private arbitration rather than the court system, effectively waiving their right to join class-action lawsuits. Brendan Ballou, author of When Companies Run the Courts, argues these clauses give companies structural advantages in dispute resolution because arbitrators are often selected by repeat-player corporations and proceedings are private.

How are in-house legal teams using AI for regulatory compliance?

Corporate legal departments are deploying AI tools to monitor incidents, predict emerging compliance risks, and automate document review tasks. Westpac’s legal team, for example, won internal funding in 2025 for an AI tool that extracts and assesses compliance-related information to identify risk trends — a function the bank’s legal director described as a departure from legal’s traditionally reactive role.