Current Month (June 2026)
Business Crimes & Corporate Compliance
Export Regulations in Action: The Shutdown of Anthropic’s AI Models Fable 5 and Mythos 5
By Margaret M. Cassidy, Cassidy Law
On June 12, 2026, using its authority pursuant to U.S Export Administration Regulations (“EAR”) (15 C.F.R. 744.11(c)), the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) issued Anthropic a directive ordering it to restrict foreign access to its newest artificial intelligence models Fable 5 and Mythos 5 for national security reasons.
Anthropic reported on its website that both the government and the tech industry raised concerns that the safeguards built into its two new models could be defeated. If so, given the two models’ ability for autonomous reasoning, bad actors could use it, for example, to generate code to execute cyberattacks on critical infrastructure. Anthropic argues that the risk is limited and no more concerning than the models of its competitors.
Anthropic faced two regulatory hurdles once it received the directive. First, U.S. export regulations treat the release of export-controlled technology to a foreign national, even those legally in the U.S., as an export to nation of their citizenship, a “deemed export” (15 C.F.R. 734.13). Second, allowing any foreign person to access the two models is considered an intangible technology transfer, that is, an export to the foreign person, which, upon receipt of the BIS directive, meant Anthropic had to obtain an export license to do so.
Since failing to comply with U.S. export regulations carries both civil fines and criminal penalties, and having no methods to identify its users’ nationalities or to obtain export licenses, Anthropic decided to disable both models to comply. As of June 26, media is reporting that the U.S. Department of Commerce and Anthropic are in negotiations to address the government’s concerns. To that end, the government has allowed Anthropic’s Mythos 5 to be released to more than one hundred U.S. companies and U.S. government agencies without an export license for any non-U.S. nationals who may be working for these entities because the government has determined that Anthropic has instituted “appropriate safeguards.”
Failing to comply with U.S. export regulations may carry criminal penalties under the Export Control Reform Act of 2018 of up to twenty years of imprisonment and up to $1 million in fines per violation, or both (50 U.S.C. §§ 4801–4852; 15 C.F.R. 764.3). Administrative penalties may result in fines up to $374,474 per violation or twice the value of the transaction, whichever is greater (15 C.F.R. 764.3).
Companies developing frontier models need to consider the implications of BIS’s actions relative to their own models and be prepared for the possibility that the models may be identified as an export-controlled item. Further, AI users need to review their vendor agreements to understand their rights should a model be determined a controlled item.
Consumer Finance Law
Are Texts “Calls”? District Court Decides Hot-Button TCPA Issue in Plaintiff’s Favor
By Daniel Chin, Pilgrim Christakis
As those in the telemarketing space are likely aware, whether text messages constitute “telephone calls” for purposes of the Telephone Consumer Protection Act (“TCPA”) has been a heavily litigated issue as plaintiffs continue to turn their sights on Short Message Service (“SMS”) marketing campaigns. Across the nation, and especially post-Loper Bright, courts are largely divided. A recent decision out of the Eastern District of Pennsylvania sheds light on why some jurisdictions continue to unequivocally hold that text messages are “calls” under the TCPA.
In Pero v. Brown-Daub Chevrolet, No. 25-7016, 2026 WL 1747214 (E.D. Pa. June 17, 2026), Plaintiff alleges that, despite opting out of marketing communications, she received a total of eight unwanted text messages from Defendant car dealership. Plaintiff also claims that she had previously registered her phone number with the Do-Not-Call Registry. On these and other allegations, Plaintiff filed a class action lawsuit against Defendant, seeking damages for violations of the DNC provisions of the TCPA. In response, Defendant filed a motion to dismiss, arguing, in part, that text messages are not “calls” as contemplated by the TCPA.
In denying Defendant’s motion, the Court acknowledged that the Supreme Court had abolished Chevron deference in Loper Bright Enterprises. v. Raimondo. Nevertheless, the Court’s decision drew heavily on the fact that the Federal Communications Commission (“FCC”) had previously clarified that, in the context of alleged Do Not Call and other TCPA violations, consumers are afforded the same protections from unwanted text messages as they are from telephone calls. The Court also noted that, post-Loper Bright, courts in the Eastern District of Pennsylvania and other districts had also held that a text is a “call” for TCPA DNC purposes.
The Court’s decision to deny Defendant’s motion underscores the uphill battle that TCPA defendants face on this front. Even though courts have been instructed to rely on the ordinary principles of statutory interpretation, the FCC’s guidance had been longstanding. Coupled with the common sentiment against unwanted telemarketing communications, including texts, it is foreseeable that courts will continue to be divided on whether a text constitutes a “call” for TCPA purposes. The safest course for putative TCPA defendants is to adopt and adhere to established TCPA compliance best practices.
