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Italy Closes Probe Into DeepSeek After Commitments to Warn Users of AI “Hallucination” Risks

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Italy’s antitrust authority has closed an investigation into Chinese artificial intelligence system DeepSeek after the company agreed to binding commitments aimed at improving warnings about the risk of AI-generated false information.

The probe, launched last June by Italy’s antitrust and consumer protection authority AGCM, focused on allegations that DeepSeek failed to adequately inform users that its AI system could generate inaccurate, misleading, or fabricated content — commonly referred to as “hallucinations.”

The decision to end the investigation was announced in the AGCM’s weekly bulletin published on Monday. According to the regulator, the commitments were submitted by Hangzhou DeepSeek Artificial Intelligence and Beijing DeepSeek Artificial Intelligence, which jointly own and operate the DeepSeek platform.

The agreed measures include clearer and more prominent disclosures explaining the risk that, based on user inputs, the AI model may produce outputs containing incorrect or invented information. The AGCM said the new disclosures are designed to be more transparent, intelligible, and immediately visible to users.

“The commitments presented by DeepSeek make disclosures about the risk of hallucinations easier, more transparent, intelligible, and immediate,” the authority said in its bulletin.

The case highlights growing regulatory scrutiny across Europe over how AI systems communicate their limitations to users, particularly as generative AI tools become more widely adopted in consumer-facing applications.

Telstra Fined $12 Million for Secretly Slowing Internet Speeds of Nearly 9,000 Customers

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Australia’s largest telecommunications company, Telstra, has been ordered to pay A$18 million (about $11.9 million) after a court found it misled thousands of customers by reducing their internet speeds without informing them, the Australian Competition and Consumer Commission (ACCC) announced on Friday.

According to the ACCC, Telstra migrated 8,897 customers from its low-cost brand Belong to a plan with half the original upload speed between October and November 2020, without any notification or consent. This left users unknowingly paying for a downgraded service.

“Telstra’s failure to inform customers that their broadband service had been changed denied them the opportunity to decide whether the changed service was suitable for their needs,” said ACCC Commissioner Anna Brakey. The regulator emphasized that customers deserve transparency and control over the quality of the services they pay for.

Beyond the fine, Telstra has committed to compensating affected customers, offering A$15 credits or refunds for every month they were on the reduced-speed plan. A Telstra spokesperson told Reuters that the company accepted the court’s decision and was finalizing remediation efforts.

The ruling adds to growing regulatory scrutiny of Australia’s telecom sector, particularly after Optus—one of Telstra’s main competitors—suffered two emergency call outages last month, one of which was linked to four deaths.

On the market, Telstra shares fell 0.7% following the announcement, while the broader Australian benchmark index (.AXJO) rose 0.5%.

The case underscores how digital infrastructure providers are increasingly being held accountable for consumer transparency and service integrity, as Australia tightens oversight over its critical communications networks.

Apple, Google, and Meta Must Face Lawsuits Over Casino-Style Gambling Apps

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A U.S. federal judge has ruled that Apple, Google, and Meta Platforms must face lawsuits accusing them of promoting and profiting from illegal casino-style gambling apps, rejecting their efforts to dismiss the claims under Section 230 of the Communications Decency Act.

In a decision issued Tuesday, Judge Edward Davila of the U.S. District Court in San Jose, California, denied the companies’ main argument that the federal law shields them from liability for third-party content, saying the lawsuits focus on their active role in processing payments and collecting commissions, not merely hosting apps.

The lawsuits, filed as proposed class actions, allege that Apple’s App Store, Google Play Store, and Meta’s Facebook enabled and profited from apps simulating “Vegas-style” slot machine gambling that have led to user addiction, depression, and even suicidal behavior. The plaintiffs claim the companies brokered and collected 30% commissions — estimated to exceed $2 billion — from in-app purchases.

While some state-level claims were dismissed, Davila allowed most consumer protection claims to proceed, except those filed in California. He stated that the platforms’ activities went beyond publishing and that providing “neutral tools” did not absolve them from responsibility.

“The crux of plaintiffs’ theory is that defendants improperly processed payments for social casino apps,” Davila wrote. “It is beside the point whether that activity turns defendants into bookies or brokers.”

The companies now have the option to appeal immediately to the 9th U.S. Circuit Court of Appeals, with Davila acknowledging the national importance of Section 230 immunity questions.

The ongoing litigation, which began in 2021, consolidates several related cases:

  • In re Apple Inc. App Store Simulated Casino-Style Games Litigation (No. 21-md-02985)

  • In re Google Play Store Simulated Casino-Style Games Litigation (No. 21-md-03001)

  • In re Facebook Simulated Casino-Style Games Litigation (No. 21-02777)

The plaintiffs are seeking unspecified compensatory and triple damages, along with other remedies.