Category: 3. Business

Webcasts  |  December 16, 2025

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Join us for a half-hour recorded briefing covering several M&A practice topics. The webcast is part of a series of quarterly webcasts designed to provide quick insights into emerging issues and practical advice on how to manage common M&A problems. Topics covered include the use of “clean teams” in M&A diligence, the impact of state “HSR” laws, and lessons from Activision II regarding M&A sale processes.

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MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of .50 credit hour, of which .50 credit hour may be applied toward the area of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of .50 hour in the General category.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

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PANELISTS:

Alexander Orr is a partner in the Washington, D.C. office of Gibson Dunn where his practice focuses primarily on mergers and acquisitions. Mr. Orr advises public and private companies, private equity firms, boards of directors and special committees in a wide variety of complex corporate matters, including mergers and acquisitions, asset sales, leveraged buyouts, spin-offs, joint ventures, equity and debt financing transactions and corporate governance matters, including securities law compliance. Mr. Orr has been named a Rising Star by Super Lawyers, and in Best Lawyers: Ones to Watch in America, for his work in mergers and acquisitions.

Jamie France is a partner in the Washington, D.C. office of Gibson Dunn and a member of the firm’s Antitrust and Competition Practice Group.Jamie represents clients in antitrust merger and non-merger investigations before the U.S. Federal Trade Commission and the U.S. Department of Justice Antitrust Division, as well as in complex private and government antitrust litigation. She also counsels clients on a range of antitrust merger and conduct matters. Her experience encompasses a broad set of industries, including healthcare, technology, consumer goods, retail, pharmaceuticals, software, financial services, and gaming. Jamie has been recognized in the 2024 edition of the Best Lawyers: Ones to Watch® in America for Antitrust Law and Litigation – Antitrust.

Sophia (Vandergrift) Hansell is a partner in the Washington, D.C. office of Gibson Dunn. She is a member of the Antitrust and Competition Practice Group. Before joining the firm, Sophie served as an attorney in the Mergers IV Division of the Federal Trade Commission’s Bureau of Competition, where she focused on merger review and enforcement litigation. Leveraging her experience in government enforcement, Sophie’s practice focuses on complex antitrust litigation and investigations before the Department of Justice, Federal Trade Commission, and state attorneys general. She also has experience counseling companies on a broad range of competition issues relating to M&A transactions, including pre-deal risk assessments, transaction negotiations, and gun jumping issues. Sophie also develops and executes strategies to secure merger clearance with U.S. and foreign competition authorities. She has been recognized by “Lawdragon 500 X – The Next Generation” guide for three consecutive years (2023-2025), and named a “Rising Star” in Antitrust and Competition by IFLR in 2021 and by Euromoney Legal Media Group in 2020.

Stephen Glover is a partner in the Washington, D.C. office of Gibson Dunn who has served as Co-Chair of the firm’s Global Mergers and Acquisitions Practice. Stephen has an extensive practice representing public and private companies in complex mergers and acquisitions, joint ventures, equity and debt offerings, and corporate governance matters. His clients include large public corporations, emerging growth companies and middle market companies in a wide range of industries. He also advises private equity firms, individual investors, and others. Stephen has been ranked in the top tier of corporate transactions attorneys in Washington, D.C. for the past nineteen years (2005 – 2025) by Chambers USA America’s Leading Business Lawyers. He has also been selected by Chambers Global for the past five years as a top lawyer for USA Corporate/M&A. Chambers has singled out Stephen as the only “Star” corporate lawyer in the District of Columbia. Stephen has also been named Washington, D.C. “Lawyer of the Year” by The Best Lawyers in America® in the 2026 edition for Securities/Capital Markets Law, and in 2018 for Mergers and Acquisitions Law. In 2018, he was recognized by BTI Consulting as a BTI Client Service All-Star MVP for making the Client Service All-Star list in four consecutive years.

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

GSK plc (LSE/NYSE: GSK) today announced that the US Food and Drug Administration (FDA) has approved Exdensur (depemokimab-ulaa) as an add-on maintenance treatment of severe asthma characterised by an eosinophilic phenotype in adult and paediatric patients aged 12 years and older.

The FDA approval of Exdensur is based on data from the SWIFT-1 and SWIFT-2 phase III trials. In these studies, depemokimab demonstrated sustained exacerbation reduction with two doses per year versus placebo, both plus standard of care. Treatment with depemokimab resulted in a significant 58% and 48% reduction in the rate of annualised asthma exacerbations (asthma attacks) over 52 weeks from SWIFT-1 and SWIFT-2, respectively [rate ratio (95% confidence interval) p-value: SWIFT-1 0.42 (0.30, 0.59) p<0.001 and SWIFT-2 0.52 (0.36, 0.73) p<0.001] (AER depemokimab versus placebo: SWIFT-1 0.46 vs. 1.11 and SWIFT-2 0.56 vs. 1.08 exacerbations per year).¹

In a secondary endpoint from SWIFT-1 and SWIFT-2, patients treated with depemokimab experienced numerically fewer exacerbations requiring hospitalisation and/or emergency department visits (1% and 4%) compared with placebo (8% and 10%), respectively. A pre-specified pooled analysis of the two trials showed there was a 72% reduction in the annualised rate of clinically significant exacerbations requiring hospitalisation and/or ED visits over 52 weeks for depemokimab compared with placebo [rate ratio 0.28, 95% CI (0.13, 0.61), nominal p=0.002] (AER depemokimab 0.02 versus placebo 0.09). Across these trials, depemokimab was well-tolerated, with patients experiencing a similar rate and severity of side effects as those receiving placebo.¹

Kaivan Khavandi, SVP & Global Head, Respiratory, Immunology & Inflammation R&D, GSK said: “Physicians in the US now have the option to provide sustained protection from exacerbations for patients living with severe asthma with an eosinophilic phenotype in just two doses a year. Exdensur could redefine patient care and further establish the use of biologics for those who continue to experience exacerbations despite treatment.”

Depemokimab is a novel therapy that has been developed with an extended half-life, enabling the sustained suppression of disease-driving type 2 inflammation with twice-yearly dosing.¹ These distinct properties could potentially improve patient outcomes while reducing health system burden.

An estimated 2 million Americans live with severe asthma and half continue to experience frequent exacerbations that may lead to hospitalisations, emergency department visits and corresponding increased health system costs.^2,3,4 While biologics have demonstrated benefit in controlling severe asthma, only 20% of eligible patients in the US currently receive one, increasing their risk of exacerbations and worsening disease.⁵ Longer dosing intervals have been associated with an increased likelihood that patients would consider a biologic and 73% of physicians believe it would be beneficial.^6,7

Geoffrey Chupp, MD, Professor of Medicine, Pulmonary, Critical Care and Sleep Medicine, Yale University said: “Current biologic treatments for asthma are often underutilised and frequent injections can be inconvenient for many patients and lead to inconsistent use. There is clearly an opportunity to provide a longer duration of protection from exacerbations between injections for severe asthma patients that reduces the frequency of doses and may improve overall health care utilisation. Exdensur could empower physicians and patients to potentially achieve their treatment goals with fewer injections.”

Tonya Winders, President and CEO, Global Allergy & Airways Patient Platform said: “The struggle for people living with severe asthma is immense, with many silently enduring continued symptom recurrence and exacerbations. An innovative treatment option like Exdensur that offers the long-acting protection from exacerbations that severe asthma patients with an eosinophilic phenotype deserve, with the benefit of fewer doses, is truly welcome.”

Depemokimab recently received marketing authorisation from the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) and a positive CHMP opinion in Europe, with an approval decision expected in Q1 2026. Regulatory submissions are also under review across the globe, including in China and Japan.

About severe asthma

Severe asthma is defined as asthma that requires treatment with medium- to high-dose inhaled corticosteroids plus a second therapy (i.e., systemic corticosteroid or biologic) to prevent it from becoming uncontrolled, or which remains uncontrolled despite therapy.⁸ Type 2 inflammation is the underlying cause of pathology in more than 80% of patients with severe asthma, in which patients exhibit elevated levels of eosinophils (a type of white blood cell).⁹

About Exdensur (depemokimab-ulaa)

Exdensur is the first ultra-long-acting biologic being evaluated for certain respiratory diseases with underlying type 2 inflammation, such as severe asthma. It has been developed with an extended half-life to enable twice-yearly dosing.¹

Please see accompanying US Prescribing Information here.

About the SWIFT phase III trials

Results from the SWIFT trials were presented at the 2024 European Respiratory Society International Conference and published in the New England Journal of Medicine.¹

The SWIFT-1 and SWIFT-2 clinical trials assessed the efficacy and safety of depemokimab adjunctive therapy in 382 and 380 participants with severe asthma who were randomised to receive depemokimab or a placebo respectively, in addition to their standard of care (SOC) treatment with medium to high-dose inhaled corticosteroids plus at least one additional controller. The full analysis set in SWIFT-1 included 250 patients in the depemokimab plus SOC arm and 132 in the placebo plus SOC arm; in SWIFT-2, 252 patients were included in the depemokimab plus SOC arm and 128 in the placebo plus SOC arm.¹

About the depemokimab development programme

The phase III programme consists of SWIFT-1 and SWIFT-2 in severe asthma, with an open label extension study (AGILE), and the ANCHOR-1 and ANCHOR-2 trials in chronic rhinosinusitis with nasal polyps (CRSwNP).^1,10,11 Depemokimab is currently being evaluated in phase III trials for the treatment of other diseases with underlying type 2 inflammation, including OCEAN for EGPA and DESTINY for HES.^12,13 GSK has also initiated the ENDURA-1, ENDURA-2 and VIGILANT phase III trials assessing the efficacy and safety of depemokimab as an add-on therapy in patients with uncontrolled moderate to severe COPD with type 2 inflammation.¹⁴

About GSK in respiratory

GSK continues to build on decades of pioneering work to deliver more ambitious treatment goals, develop the next generation standard of care and redefine the future of respiratory medicine for hundreds of millions of people with respiratory diseases. With an industry-leading respiratory portfolio and pipeline of vaccines, targeted biologics and inhaled medicines, GSK is focused on improving outcomes and the lives of people living with all types of asthma and COPD, along with less understood refractory chronic cough or rarer conditions like systemic sclerosis with interstitial lung disease. GSK is harnessing the latest science and technology with the aim of modifying the underlying disease dysfunction and preventing progression.

Client Alert  |  December 16, 2025

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This update reviews the ISS and Glass Lewis U.S. policy updates.  Both firms have announced policy updates regarding pay-for-performance and shareholder rights and voting standards.

Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis), the two major proxy advisory firms, recently released updates to their proxy voting policies for the 2026 proxy season.

• The ISS U.S. policy updates are available here. The ISS updates apply for shareholder meetings on or after February 1, 2026.  ISS plans to release an updated Frequently Asked Questions document that will include more information about its policy changes in the coming weeks, but posted revisions to its executive compensation FAQs earlier this month.
• The Glass Lewis U.S. policy updates are included in its 2026 S. Benchmark Policy Guidelines, available here. The Glass Lewis 2026 voting guidelines apply for shareholder meetings held on or after January 1, 2026.  The policy clarified that “the Benchmark Policy reflects broad investor opinion and widely accepted governance principles and is intended to provide clients with nuanced analysis informed by market best practice, regulation, and prevailing investor sentiment” and is just one of Glass Lewis’ policy offerings.

This update reviews the ISS and Glass Lewis U.S. policy updates.  Both firms have announced policy updates regarding pay-for-performance and shareholder rights and voting standards.  Glass Lewis also issued policy updates on mandatory arbitration provisions, the practice of bundling governing document amendments and company responsiveness to shareholder proposals.  ISS somewhat expanded the circumstances in which it could recommend that shareholders vote against directors responsible for awarding excessive non-employee director compensation.

A. Executive Compensation

• ISS – Pay-for-Performance Assessments. At S&P 1500, Russell 3000, and Russell 3000E companies, ISS has adjusted its pay-for-performance screens to consider a longer time horizon—a five-year period rather than the current three-year period.  ISS says this extension will better align with how investors evaluate a company’s long-term performance when making comparisons with peers.  ISS also changed how it will review the multiple of the CEO’s total pay relative to the peer group median, with ISS assessing over both a one- and three-year period rather than the current approach of looking at the most recent fiscal year.
• Glass Lewis – Pay-for-Performance Scorecard. Glass Lewis overhauled its pay-for-performance guidelines to replace the current model, which uses a single letter grade of “A” through “F,” with a scorecard-based approach.  The new scorecard will involve six tests:
  • Granted CEO pay v. total shareholder return;
  • Granted CEO pay v. financial performance;
  • CEO short-term incentive payouts v. total shareholder return;
  • Total granted named executive officer pay v. financial performance;
  • CEO compensation-actually-paid v. total shareholder return; and
  • Qualitative factors.

Glass Lewis will issue a rating in each of the six categories and then aggregate the ratings on a weighted basis to determine an overall score ranging from 0 to 100.  It added that a specific comparison between a company’s executive pay levels and its peers’ executive pay levels may be discussed in its analysis for additional insight into the score.

• ISS – Time-Based Equity Awards with Extended Horizons. ISS revised the list of qualitative factors it will consider in its assessment of specific executive compensation packages when its quantitative executive compensation analysis indicates significant unsatisfactory long-term pay-for-performance alignment or a misalignment between pay and performance.  ISS indicated it will look favorably on time-based equity awards with extended time horizons and/or stock retention requirements.  It noted that many institutional investors have voiced support for a more flexible qualitative approach whereby time-based equity can comprise a majority (or all) of the equity pay mix so long as it is sufficiently long-term in nature, through extended vesting and/or retention requirements.
• ISS – Company Responsiveness to Shareholders. ISS announced that, beginning in 2026, it will provide more leeway for companies to show that they attempted to respond to what it views as low say-on-pay support (support of less than 70% of votes cast) where the company demonstrated it made “meaningful engagement efforts” but nevertheless was unable to obtain specific investor feedback.  ISS said it will also consider significant corporate activity, such as a recent merger or proxy contest, when assessing responsiveness—an acknowledgment that events of such scale can depress say-on-pay voting support.
• ISS – Excessive Security-Related Perquisites. In the revised ISS executive compensation FAQs, ISS addressed whether it views security-related perquisites differently from other types of perquisites. ISS noted that it “is unlikely to raise significant concerns for relatively high security-related perquisite values, so long as the company discloses a reasonable rationale for such costs.” ISS then gave an example of “disclosure of an internal or third-party assessment, and a broad description of the security program and its connection to shareholder interests” as generally addressing concerns about relatively large security costs. That said, “extreme outliers in security costs may still drive significant concerns, particularly if not adequately addressed in the proxy disclosure.”

B. Corporate Governance Matters

• ISS – Social and Environmental Shareholder Proposals. ISS now will apply a case-by-case assessment to many common environmental and social shareholder proposals.  In particular, ISS will individually consider and analyze shareholder proposals asking that a company provide reports on climate change-related risks facing the business or its investments, operational greenhouse gas emissions, diversity and data policies and practices, potential supply chain human rights concerns, and political contributions.  ISS made the change “to better reflect an approach that resonates with broad shareholder sentiment.” It previously recommended that shareholders “generally vote for” such proposals based on a range of factors, depending on the type of proposal.  When weighing whether to support any such proposal, ISS will consider: whether the company already provides such information; the scope of the request; deviations from industry sector peer company standards; and whether the company has recent significant related litigation, violations, or fines, depending on the type of proposal.
• ISS – Problematic Capital Structures. ISS clarified its position on capital structures with unequal voting rights and confirmed it objects to the practice regardless of whether the company labels the shares “common” or “preferred.” It reiterated that it recommends shareholders generally withhold votes or vote against certain directors if the company has a multiclass capital structure with disparate voting rights.  Notable exceptions exist, however, in cases where the preferred stock is convertible into common shares and vote on as “as converted” basis or where the enhanced voting power of the preferred is limited in time and applicability, such as where it is intended to overcome low voting turnout and ensure approval of a specific non-controversial agenda item and “mirrored voting” applies.
• Glass Lewis – Shareholder Rights Erosion. Glass Lewis will recommend that shareholders vote against the chair of the governance committee, or the entire governance committee, for certain attempts by a company’s board to reduce or eliminate shareholder rights through governing document amendments.  It highlighted that such amendments could include: limits on the ability of shareholders to submit proposals; limits on the ability of shareholders to file derivative lawsuits; and the introduction of plurality voting in lieu of majority voting.
• Glass Lewis – Clarifying Supermajority Vote Requirements. Glass Lewis clarified its policy on supermajority voting requirements to note that, in instances where a company wishes to remove supermajority voting requirements, Glass Lewis will evaluate such proposals on a case-by-case basis.  Further, Glass Lewis said that when a company has a large or controlling shareholder, supermajority voting requirements may be warranted to safeguard the interests of the minority; in such cases, Glass Lewis may oppose the elimination of the supermajority requirements.

C. Additional ISS Updates

ISS adopted the following additional updates of note:

• High Non-Employee Director Pay. ISS has previously recommended that shareholders vote against directors responsible for a pattern of awarding excessive non-employee director compensation.  Now ISS has expanded its policy to note that adverse recommendations may be warranted for “otherwise problematic” compensation packages.  It added that “otherwise problematic” compensation can include performance awards, retirement benefits, and objectionable perks.  It also said negative voting recommendations may be appropriate in the first year of excessive or problematic non-employee director compensation packages if the issues are “egregious.”
• Updates to Equity Plan Scorecard. ISS updated its existing equity-based compensation plan scorecard in two respects.  First, the scorecard will now also consider whether the specific plan includes cash-denominated individual award limits for non-employee directors.  Second, the scorecard will consider whether the plan in question is lacking in sufficient (or any) positive plan design features despite an overall passing score such that it would be too egregious to permit the plan notwithstanding any positive factors.

D. Additional Glass Lewis Updates

Glass Lewis adopted several additional updates, as outlined below.  Where relevant, for purposes of comparison, the discussion also addresses how ISS approaches the issue.

• Mandatory Arbitration Provisions. Glass Lewis’s guidelines now discuss its approach to mandatory arbitration provisions.  In particular, Glass Lewis said that when it assesses a company’s governing documents after an IPO, spin-off, or direct listing, it will, in some cases, issue a recommendation that shareholders vote against the election of the chair of the governance committee or the entire committee if a company has adopted a mandatory arbitration provision.  In addition, Glass Lewis will generally recommend that shareholders vote against any bylaw or charter amendment seeking to adopt a mandatory arbitration provision unless the company provides sufficient rationale and disclosure.
• Governing Document Amendments Receive Case-By-Case Review. Glass Lewis noted that it is “strongly opposed” to the practice of bundling several amendments under a single proposal because it prevents shareholders from reviewing each amendment on its own merits.  Glass Lewis now will assess each proposed change individually and will only recommend votes for the proposal when, on balance, the amendments are in the best interest of shareholders.  Glass Lewis cautioned that material concerns with a single proposed amendment may be sufficient for it to recommend votes against to an entire bundled suite of amendments.
• Company Responsiveness to Shareholders. Noting the recent decision by the staff of the Securities and Exchange Commission (SEC) to curtail the types of shareholder proposal no-action requests it will review during the 2026 proxy season, Glass Lewis removed its prior general policy to recommend votes against all members of the governance committee if a company omits a shareholder proposal but the SEC has declined to state a view on whether such resolution should be excluded.  However, Glass Lewis reiterated its support for shareholders’ right to submit proposals for consideration at companies’ annual meetings.  It noted that Glass Lewis views the right of shareholders to file proposals as “critical to the proper functioning of our system of corporate governance and in the best economic interest of all shareholders.”  It further credited shareholder proposals with reforms such as declassified boards and the adoption of simple majority vote requirements.  Overall, this year, while specific guidance has been removed, under its benchmark policy, Glass Lewis will “generally approach these matters with the basic premise that shareholders should be afforded the opportunity to vote on matters of material importance.” However, “given ongoing changes and the prospect of additional changes to the shareholder proposal process,” Glass Lewis may update its benchmark policy “prior to or during the 2026 proxy season should its approach to these matters change or regulatory developments warrant such an update.”ISS’s current Procedures & Policies Frequently Asked Questions state that it generally recommends shareholders vote against the chair of the nominating and governance committee if a company omits a properly submitted proposal without obtaining a voluntary withdrawal by the proponent, no-action relief from SEC Staff, or a U.S. District Court ruling that the proposal can be excluded.

  Despite the removal of its prior guidance, Glass Lewis, for its part, may advise shareholders to vote against all members of the nominating and governance committee when a proposal is omitted and the SEC staff has declined to express a view on the permissibility of that exclusion.  The existing voting policies adopted by ISS and Glass Lewis emerged in a markedly different environment and exemplify the kind of monolithic corporate governance methodology that regulators and lawmakers have criticized in recent years.  In light of the rationale and broad reach of the SEC staff’s November 2025 statement—and the continued public dissection of proxy advisors’ practices—companies should pay attention to how ISS and Glass Lewis choose to proceed during the upcoming proxy season.

• Final Year for the Benchmark Policy. Glass Lewis announced in October that, beginning in 2027, it will pivot from its standard Benchmark set of proxy voting guidelines toward a suite of tailored, customized voting policies from which its clients will be able to choose depending on their policy goals.  Glass Lewis CEO Bob Mann explained the change as necessary to adapt to clients’ diverging approaches to voting preferences and procedures: “Investors want proxy voting frameworks and guidance that reflect their own unique investment strategies, stewardship goals and voting preferences,” Mann said in a press release announcing the change.

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The following Gibson Dunn lawyers prepared this update: Elizabeth Ising, Sean Feller, Krista Hanvey, Julia Lapitskaya, Geoffrey Walter, Lori Zyskowski, and Thomas Franck.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding the SEC’s announcement, or federal securities laws and regulations more generally. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Securities Regulation & Corporate Governance or Executive Compensation & Employee Benefits practice groups:

Securities Regulation & Corporate Governance:
Aaron Briggs – San Francisco (+1 415.393.8297, abriggs@gibsondunn.com)
Mellissa Campbell Duru – Washington, D.C. (+1 202.955.8204, mduru@gibsondunn.com)
Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com)
Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com)
Brian J. Lane – Washington, D.C. (+1 202.887.3646, blane@gibsondunn.com)
Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com)
Ronald O. Mueller – Washington, D.C. (+1 202.955.8671, rmueller@gibsondunn.com)
Michael A. Titera – Orange County (+1 949.451.4365, mtitera@gibsondunn.com)
Geoffrey E. Walter – Washington, D.C. (+1 202-887-3749, gwalter@gibsondunn.com)
Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)

Executive Compensation & Employee Benefits:
Sean C. Feller – Los Angeles (+1 310.551.8746, sfeller@gibsondunn.com)
Krista Hanvey – Dallas (+1 214.698.3425, khanvey@gibsondunn.com)
Gina Hancock – Dallas (+1 214.698.3357, ghancock@gibsondunn.com)
Kate Napalkova – New York (+1 212.351.4048, enapalkova@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

Products and services incorporating artificial intelligence (AI) technologies have continued to rapidly develop in 2025, with competition and consumer implications for Australian consumers and businesses, an ACCC industry snapshot on AI has found.

“AI-enabled products and services are growing more and more important to consumers and businesses across Australia,” ACCC Chair Gina Cass-Gottlieb said.

“New developments have the potential to transform how Australians work, communicate, and engage with digital services. However, they also come with risks of potential harms to consumers and competition.”

“The continued rapid pace of developments in AI, and growing variety of AI applications, underscores the need for continued monitoring by regulators and governments,” Ms Cass-Gottlieb said.

The snapshot, which updates on recent trends and significant developments in generative AI since the March 2025 Final Report of the Digital Platform Services Inquiry, has reiterated the ACCC’s support for a monitoring function for emerging digital technologies under the Government’s proposed digital competition regime.

AI technologies and markets are developing rapidly, raising potential competition implications

The ACCC’s AI snapshot examined recent trends and developments in AI technology, noting several advances in foundation models and AI applications, including advancements in AI agents, since the ACCC’s March 2025 report.

“Our snapshot has outlined increasing interconnections between AI offerings and existing digital platform services, often supplied by tech giants, as AI technology matures,” Ms Cass-Gottlieb said.

“While these integrations can improve user experience, they may also have negative implications by raising barriers to entry or expansion, and consumers’ ability and willingness to switch service providers.”

The ACCC’s snapshot also reviews the developments in agentic AI, including AI agents.

“Use of agentic AI has the potential to impact how users deal with businesses online, or use digital platform services such as searching the internet,” Ms Cass-Gottlieb said.

“Their use may also give rise to new risks, such as the possibility of AI agents colluding, even where this is not expressly intended or programmed by human creators.”

The ACCC’s snapshot also explores the significant activity in terms of investments, acquisitions and partnerships in the AI sector globally and in Australia.

“Major digital platforms and AI firms are making substantial investments at all levels of the AI supply chain to support the development of more advanced AI models and to meet future demand,” Ms Cass-Gottlieb said.

“These include direct investment in AI infrastructure, partnerships between key firms, and competition to attract a limited pool of technical expertise including through ‘acquihires’. The ACCC will continue to closely monitor deals and conduct in Australia.”

Increasing consumer and business uptake of AI may amplify risks of consumer harms

The AI snapshot identified several emerging risks to consumers related to increasing use of AI services.

Potential consumer issues include the widespread use and collection of consumers’ data, use of AI to facilitate false representations or generate large volumes of fake reviews and facilitate and enhance online scams.

“The integration of AI into various digital products and services is already delivering benefits to Australian consumers, including by enabling new app functionalities and simplifying some tasks,” Ms Cass-Gottlieb said.

“However, AI also has the potential to amplify existing consumer risks relating to how businesses communicate with consumers, whether consumers are well-informed about businesses’ use of their data, and risks posed by scammers.”

For example, research commissioned by the ACCC for its March 2025 Final Report of the Digital Platform Services Inquiry indicates 83 per cent of surveyed Australian consumers  believe companies should get consent before using personal data to train AI models.

However, the ACCC’s snapshot reveals that vast amounts of consumer data is currently already collected and used to train AI models, often without consumers’ knowledge or informed consent. This is in part because of the length, complexity and ambiguity of online terms of service and privacy policies.

“We are already seeing instances where generative AI is being used to facilitate false representations about the performance or characteristics of a product or service, ” Ms Cass-Gottlieb said.

“Ghost websites, which misrepresent themselves as local businesses, often use generative AI images to build a sense of credibility.”

“Online product listings may use generative AI to make products appear more sophisticated, or of a higher quality, than they actually are,” Ms Cass-Gottlieb said.

“AI may also be used to generate and disseminate large volumes of fake reviews. These reviews may be seen as more credible and persuasive by consumers, and be increasingly more difficult to detect.”

“Similarly, AI is increasingly being used by scammers to facilitate and enhance online scam activity, often making online scams appear more credible, and harder for victims to identify,” Ms Cass-Gottlieb said.

Emerging AI technologies need continued scrutiny from governments and regulators

“The pace of continued changes since the ACCC provided the Australian Government with the Final Report of the Digital Platform Services Inquiry in March this year underscores the importance of regulators and governments continuing to monitor changing digital technologies,” Ms Cass-Gottlieb said.

The ACCC continues to strongly support the Government’s commitment to implement a new digital competition regime in response to the ACCC’s Digital Platforms Services Inquiry recommendations.

Background:

The ACCC’s Digital Markets Branch conducted a five-year inquiry into markets for the supply of digital platform services in Australia and their impacts on competition and consumers, following a direction from the Treasurer in 2020.

In the fifth DPSI interim report on regulatory reform, the ACCC made a range of recommendations to bolster competition in the digital economy, level the playing field between big tech companies and Australian businesses, and reduce prices for consumers. The recommendations include new service-specific mandatory codes of conduct for particular ‘designated digital platforms,’ based on principles set out in legislation.

In December 2023, the Government accepted the ACCC’s findings that existing competition provisions by themselves are not sufficient to address current or potential future competition harms and supported-in-principle the development of a new digital competition regime. In December 2024, the Government began consultation on the implementation of a new digital competition regime in Australia.

The March 2025 Final Report of the Digital Platform Services Inquiry reiterated the ACCC’s support for a new digital competition regime, and also made two new recommendations to Government, that:

• the ACCC should continue to have a monitoring function for emerging digital technologies under the proposed digital competition regime, and
• that the Australian Government should prioritise a whole-of-government approach to digital platform regulation and endorse the Digital Platform Regulators Forum (DP-REG) as a permanent forum with adequate resources to undertake information-sharing and collaboration between Australian digital platform regulators.

Notes to editors

‘Acquihires’ refer to acquisitions, partnerships or other arrangements between firms where the primary goal is acquiring access to employees’ talent and expertise.

‘AI agents’ are software systems that can autonomously perform tasks with minimal input from human users.

‘Artificial intelligence (AI)’ refer to the ability of computer software to perform tasks that are complex enough to simulate a level of capability or understanding usually associated with human intelligence.

‘Foundation models’ are general purpose AI models which are trained on large datasets, and allow developers to build AI applications.

‘Generative AI’ refer to a specific type of artificial intelligence that uses algorithms trained to learn the patterns and structure of their training data, and generate new content in response to prompts.

WASHINGTON – The U.S. Department of Labor’s Wage and Hour Division announced the availability of two important updates designed to improve compliance and reporting for contractors required to submit weekly payrolls under the Davis-Bacon and Related Acts.

The updates for Form WH-347, Davis-Bacon and Related Acts Weekly Certified Payroll Form, are intended to streamline and clarify the reporting process for contractors and subcontractors using the form to report their weekly payroll. The Davis-Bacon and Related Acts require contractors and subcontractors to pay workers prevailing wages on government-funded or assisted construction contracts.

The new resources include an online, fillable version of Form WH-347 that provides contractors and subcontractors with an efficient way to submit accurate weekly payroll records and will help reduce common reporting errors by allowing users to enter required information directly into the form. The division also developed an annotated Form WH-347 to provide contractors, subcontractors, consultants, labor unions, and compliance professionals with a better understanding of the form and giving clear, visual guidance on how to fill out the form.

Both the fillable and annotated forms are available and ready for immediate use on the department’s website.

“The Wage and Hour Division wants to help construction contractors and subcontractors succeed and comply with DBRA requirements,” said Wage and Hour Division Administrator Andrew Rogers. “We encourage all government contractors to review and begin utilizing these new tools. They are designed to improve accuracy, reduce administrative burden, and promote consistent reporting practices across DBRA-covered projects.”

Workers and employers can call the Wage and Hour Division with questions and requests for compliance assistance at its toll-free helpline, 866-4US-WAGE (487-9243). Contractors and subcontractors subject to DBRA requirements are encouraged to use the agency’s government contracts compliance assistance toolkit to learn about their responsibilities.

Learn more about the Wage and Hour Division, including a search tool that workers can use if they think they may be owed back wages collected by the division. Download the agency’s free timesheet app for iOS and Android devices to track hours and pay.