--- title: Which new tech laws and court rulings should business owners watch in 2026? author: Giacomo Balli published: 2026-10-05 url: https://BigBalli.com/blog/tech-laws-and-rulings-business-owners-should-watch-2026 tags: Tech Law, AI Regulation, Data Privacy, Pricing, Government Contracting --- # Which new tech laws and court rulings should business owners watch in 2026? *By Giacomo Balli* | *Published: October 5, 2026* **Short answer:** Watch four: Seattle's ban on personalized grocery pricing, unsealed filings on pirated books in the authors' case against OpenAI and Microsoft, the D.C. Circuit upholding the Pentagon's supply chain risk label on Anthropic, and Apple withdrawing Advanced Data Protection in the UK. Each changes how you price, buy AI, choose vendors or store client data. Four legal developments from September 2026 deserve an owner's attention: Seattle's ban on personalized grocery pricing, unsealed filings about pirated books in the authors' lawsuit against OpenAI and Microsoft, a federal appeals court upholding the Pentagon's supply chain risk label on Anthropic, and the UK's pressure that led Apple to withdraw its strongest iCloud encryption. Each drew hundreds of comments on Hacker News this month, and each changes a decision a business makes about pricing, AI vendors or client data. This page is general information, not legal advice. 1. **Seattle pricing ban**How you set prices 2. **OpenAI book filings**What your AI contracts promise 3. **Anthropic ruling**Which AI vendors a government contractor can use 4. **Apple UK encryption**Where client data is stored One decision per development. None requires a lawyer to spot, but some will need one to act on. ## What does Seattle's surveillance pricing ban mean for businesses? Seattle's Fair Pricing and Transparency Act, passed by the City Council on September 22, 2026, bars large grocery sellers from using a shopper's personal data to change the price that shopper sees. Loyalty programs and published group discounts stay legal. The rule covers grocers with 20 or more locations and takes effect on September 1, 2027. According to [Consumer Reports](https://advocacy.consumerreports.org/press_release/seattle-city-council-votes-to-ban-surveillance-pricing-in-sale-of-groceries/), the ordinance prevents pricing based on browsing history, real-time location, and inferences about income, family size or health. The [bill text, CB 121267](https://seattle.legistar.com/LegislationDetail.aspx?ID=8166554&GUID=050CEA54-3AED-44AE-899E-D5A4573543E2), also covers delivery services with 100 or more employees and gives shoppers a private right of action: up to $3,000 per aggrieved party, up to $10,000 for each later violation, capped at $1,000,000 per action. Consumer Reports notes that Maryland, Connecticut and New Jersey have also passed laws against the practice. A small business is outside Seattle's thresholds, but the direction is clear, and pricing software is spreading. The action for an owner: make every price you charge explainable by a written rule a customer could read, such as a coupon, a loyalty tier or a volume discount. If a pricing tool or an AI agent sets prices for you, ask the vendor in writing which customer data it uses. ## What do the OpenAI piracy filings mean for AI buyers? Briefs unsealed in September 2026 in the Authors Guild's case against OpenAI and Microsoft allege that OpenAI trained models on books from LibGen, a pirate library, and later deleted the files. The allegations are unproven, but they raise the question every AI buyer should ask: where did the vendor's training data come from? The [Authors Guild](https://authorsguild.org/news/ag-v-openai-top-execs-knew-mass-book-piracy-was-illegal/), which is a plaintiff, published excerpts from its motion for partial summary judgment, filed September 17, 2026 in federal court in Manhattan. The excerpts quote internal Slack messages about removing LibGen data from OpenAI's systems in 2022. OpenAI and Microsoft have not been found liable, and a hearing is expected in early 2027. In the [Hacker News thread](https://news.ycombinator.com/item?id=49863864), which passed 600 comments, one commenter quoted a researcher's worry that the LibGen story "showing up on HN would be unfortunate." The price of pirated training data already has a benchmark. In July 2026 a federal court in California granted final approval to the [$1.5 billion Bartz v. Anthropic settlement](https://authorsguild.org/news/court-grants-final-approval-anthropic-copyright-settlement/), about $3,000 per book, over books downloaded from pirate libraries. The action for an owner: when you buy or build on an AI model, ask for an intellectual property indemnity in the contract and a written statement of where training data came from. ## Why does the Anthropic ruling matter to government contractors? On September 25, 2026, the D.C. Circuit voted 2 to 1 to uphold the Pentagon's decision to exclude Anthropic's Claude from its supply chain under a 2018 federal procurement law. Defense contractors may not use Anthropic products in their work for the Department, so any business selling to defense agencies needs to know which AI models sit inside its tools. The [court's opinion](https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf) in Anthropic PBC v. Department of War says the exclusion followed Anthropic's refusal to relax contract terms barring Claude's use for lethal autonomous warfare and domestic surveillance. The Federal Acquisition Supply Chain Security Act lets an agency bar a supplier from its contracts and subcontracts. A March 6 memo ordered Anthropic products removed from Department systems within 180 days and barred contractors from using them in Department work. Judge Henderson dissented, and [ABC News reported](https://abcnews.com/Business/anthropic-appeals-court-declines-block-pentagon-blacklisting/story?id=136755690) that a federal judge in San Francisco had invalidated a separate, parallel designation in August. Anthropic said it is considering further review. 1. **March 3-4**Secretary of War signs and sends the supply chain risk determination 2. **March 6**Pentagon memo orders removal within 180 days and bars contractors from using Anthropic products in Department work 3. **March 9**Anthropic petitions the D.C. Circuit for review 4. **August**A San Francisco federal judge invalidates a separate, parallel designation 5. **September 25**D.C. Circuit upholds the exclusion, 2 to 1 Dates from the D.C. Circuit opinion and ABC News reporting. A commenter in the [890-comment thread](https://news.ycombinator.com/item?id=49845977) asked whether any vendor that restricts military use could now be treated as a supply chain risk. The action for an owner: if you sell to federal agencies, list every AI model inside your software and your subcontractors' tools, and require that each can be swapped for another within a set number of days. ## What does Apple's UK encryption withdrawal mean for client data? Apple stopped offering Advanced Data Protection to new UK users in February 2025 after the UK government issued an order under the Investigatory Powers Act 2016. Without it, iCloud Backup, iCloud Drive, Photos and Notes lose end-to-end encryption, so Apple holds the keys and can answer lawful requests for that data. Apple's [support statement](https://support.apple.com/en-us/122234) lists 10 iCloud categories affected, including iCloud Backup, iCloud Drive, Photos, Notes and Voice Memos. iMessage, FaceTime and the categories that are end-to-end encrypted by default are unchanged. Apple said existing UK users would be given time to turn the feature off themselves to keep using iCloud. The [Macanorak article](https://macanorak.com/two-tier-encryption-in-the-uk/) behind the 470-comment Hacker News thread describes the result as two tiers: UK users who switched Advanced Data Protection on before the cutoff kept it, and everyone else cannot enable it. This matters to any business with UK staff or UK clients whose files sit in iCloud through a phone backup, a shared folder or scanned documents in Notes. The action for an owner: keep confidential client files in a system where your company controls the encryption keys, and do not rely on staff phone backups for client records. ## Which four tech rulings should owners track this year? Owners should track four developments from September 2026: Seattle's personalized grocery pricing ban, the unsealed OpenAI and Microsoft book piracy filings, the D.C. Circuit's Anthropic supply chain ruling, and Apple's UK encryption withdrawal. Each affects a different decision, from pricing to AI contracts to data storage, and each has one concrete step an owner can take now. DevelopmentWhat happenedWho it affectsOne action Seattle CB 121267Council bans personalized grocery pricing; effective September 1, 2027Grocers with 20+ locations, delivery services with 100+ staffMake every price explainable by a written rule Authors Guild v. OpenAI and MicrosoftUnsealed briefs allege training on LibGen books; not yet decidedAnyone building on or buying AI modelsGet IP indemnity and training data provenance in AI contracts Anthropic PBC v. Department of WarD.C. Circuit upholds supply chain exclusion, 2 to 1Defense contractors and their suppliersList AI models in your tools and require swappable vendors Apple Advanced Data Protection, UKWithdrawn for new UK users since February 2025Businesses with UK staff or client files in iCloudStore client files where you hold the keys If an AI or software contract in front of you touches any of these, an [independent review](https://BigBalli.com/second-opinion) before signing costs less than renegotiating afterwards. ## Related guides - [Where does AI fit in my product?](https://BigBalli.com/where-does-ai-fit-in-my-product) - [When is an AI API wrapper enough, and when do you need more?](https://BigBalli.com/blog/build-vs-buy-ai-api-wrapper) - [The contract clauses that create the most lock-in get the least scrutiny](https://BigBalli.com/blog/the-contract-clauses-that-create-the-most-lock-in-get-the-least-scrutiny) - [Before hiring an AI consultancy, find the part that actually needs AI](https://BigBalli.com/blog/before-hiring-an-ai-consultancy-find-the-part-that-actually-needs-ai) - [D.C. Circuit opinion: Anthropic PBC v. Department of War](https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf) - [Apple: Advanced Data Protection in the United Kingdom](https://support.apple.com/en-us/122234) ## Key takeaways - Seattle banned personalized grocery pricing from September 2027; keep every price you charge explainable by a written rule. - The OpenAI filings are allegations, but the $1.5 billion Anthropic settlement already prices pirated training data at about $3,000 per book. - Ask AI vendors for an IP indemnity and a written account of where their training data came from. - Defense contractors cannot use Anthropic products in Department work, so know which AI models your tools depend on. - UK users without Advanced Data Protection have iCloud Backup, Drive, Photos and Notes readable by Apple under lawful orders. ## Frequently asked questions ### Does Seattle's surveillance pricing ban apply to my business? Only if you sell groceries and meet its thresholds: 20 or more retail locations globally, a mixed store with at least 10,000 square feet of groceries, or a delivery service with 100 or more employees. It takes effect September 1, 2027. Similar state laws exist in Maryland, Connecticut and New Jersey, so check where you operate. ### Can my business be liable for using an AI model trained on pirated books? The current lawsuits target model developers such as OpenAI, Microsoft and Anthropic, not their customers. The risk for a buyer sits in outputs that reproduce copyrighted text and in contracts without protection. Ask for an intellectual property indemnity that covers outputs, and read its caps and exclusions before relying on it. ### Can government contractors still use Claude for non-defense work? The D.C. Circuit opinion concerns the Pentagon's exclusion, and the Department's memo barred contractors from using Anthropic products in their work for the Department. Work for other clients is outside that order. Contractors should confirm with their contracting officer and counsel, because a separate designation was litigated in San Francisco. ### Is iMessage still end-to-end encrypted in the UK? Yes. Apple says iMessage and FaceTime remain end-to-end encrypted globally, including in the UK, as do the iCloud categories encrypted by default, such as Keychain and Health. The change affects 10 other iCloud categories, including iCloud Backup, iCloud Drive, Photos and Notes, which lose end-to-end encryption for UK users without the feature. ## About the author Giacomo Balli is an independent technology advisor in San Francisco. He has built software and mobile apps since 2010, runs a portfolio of more than forty live apps of his own, and reviews software, AI, and vendor decisions for owners before they commit the money. ## Disclosure Giacomo Balli sells fixed-fee independent reviews of technology decisions, including AI and software contracts. He does not build or resell software and takes no referral fees. No company named on this page paid to be mentioned. This page is general information and not legal advice; consult a lawyer about your situation. ## Questions this answers **Does Seattle's surveillance pricing ban apply to my business?** Only if you sell groceries and meet its thresholds: 20 or more retail locations globally, a mixed store with at least 10,000 square feet of groceries, or a delivery service with 100 or more employees. It takes effect September 1, 2027. Similar state laws exist in Maryland, Connecticut and New Jersey, so check where you operate. **Can my business be liable for using an AI model trained on pirated books?** The current lawsuits target model developers such as OpenAI, Microsoft and Anthropic, not their customers. The risk for a buyer sits in outputs that reproduce copyrighted text and in contracts without protection. Ask for an intellectual property indemnity that covers outputs, and read its caps and exclusions before relying on it. **Can government contractors still use Claude for non-defense work?** The D.C. Circuit opinion concerns the Pentagon's exclusion, and the Department's memo barred contractors from using Anthropic products in their work for the Department. Work for other clients is outside that order. Contractors should confirm with their contracting officer and counsel, because a separate designation was litigated in San Francisco. **Is iMessage still end-to-end encrypted in the UK?** Yes. Apple says iMessage and FaceTime remain end-to-end encrypted globally, including in the UK, as do the iCloud categories encrypted by default, such as Keychain and Health. The change affects 10 other iCloud categories, including iCloud Backup, iCloud Drive, Photos and Notes, which lose end-to-end encryption for UK users without the feature. --- **Tags:** Tech Law, AI Regulation, Data Privacy, Pricing, Government Contracting --- *View the [HTML version](https://BigBalli.com/blog/tech-laws-and-rulings-business-owners-should-watch-2026) of this post.*