Technologies

A Federal Moratorium on State AI Rules Is Inching Closer to Passing. Why It Matters

Congress is considering a policy that would stop states from having their own regulations around artificial intelligence.

States and local governments would be limited in how they can regulate artificial intelligence under a proposal currently before Congress. AI leaders say the move would ensure the US can lead in innovation, but critics say it could lead to fewer consumer protections for the fast-growing technology.

The proposal, as passed by the House of Representatives, says no state or political subdivision «may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems or automated decision systems» for 10 years. In May, the House added it to the full budget bill, which also includes the extension of the 2017 federal tax cuts and cuts to services like Medicaid and SNAP. The Senate has made some changes, namely that the moratorium would only be required for states that accept funding as part of the $42.5 billion Broadband, Equity, Access, and Deployment program.

AI developers and some lawmakers have said federal action is necessary to keep states from creating a patchwork of different rules and regulations across the US that could slow the technology’s growth. The rapid growth in generative AI since OpenAI’s ChatGPT exploded on the scene in late 2022 has led companies to wedge the technology in as many spaces as possible. The economic implications are significant, as the US and China race to see which country’s tech will predominate, but generative AI poses privacy, transparency and other risks for consumers that lawmakers have sought to temper.

«[Congress has] not done any meaningful protective legislation for consumers in many, many years,» Ben Winters, director of AI and privacy at the Consumer Federation of America, told me. «If the federal government is failing to act and then they say no one else can act, that’s only benefiting the tech companies.»

Efforts to limit the ability of states to regulate artificial intelligence could mean fewer consumer protections around a technology that is increasingly seeping into every aspect of American life. «There have been a lot of discussions at the state level, and I would think that it’s important for us to approach this problem at multiple levels,» said Anjana Susarla, a professor at Michigan State University who studies AI. «We could approach it at the national level. We can approach it at the state level, too. I think we need both.»

Several states have already started regulating AI

The proposed language would bar states from enforcing any regulation, including those already on the books. The exceptions are rules and laws that make things easier for AI development and those that apply the same standards to non-AI models and systems that do similar things. These kinds of regulations are already starting to pop up. The biggest focus is not in the US, but in Europe, where the European Union has already implemented standards for AI. But states are starting to get in on the action.

Colorado passed a set of consumer protections last year, set to go into effect in 2026. California adopted more than a dozen AI-related laws last year. Other states have laws and regulations that often deal with specific issues such as deepfakes or require AI developers to publish information about their training data. At the local level, some regulations also address potential employment discrimination if AI systems are used in hiring.

«States are all over the map when it comes to what they want to regulate in AI,» said Arsen Kourinian, a partner at the law firm Mayer Brown. So far in 2025, state lawmakers have introduced at least 550 proposals around AI, according to the National Conference of State Legislatures. In the House committee hearing last month, Rep. Jay Obernolte, a Republican from California, signaled a desire to get ahead of more state-level regulation. «We have a limited amount of legislative runway to be able to get that problem solved before the states get too far ahead,» he said.

While some states have laws on the books, not all of them have gone into effect or seen any enforcement. That limits the potential short-term impact of a moratorium, said Cobun Zweifel-Keegan, managing director in Washington for the International Association of Privacy Professionals. «There isn’t really any enforcement yet.»

A moratorium would likely deter state legislators and policymakers from developing and proposing new regulations, Zweifel-Keegan said. «The federal government would become the primary and potentially sole regulator around AI systems,» he said.

What a moratorium on state AI regulation means

AI developers have asked for any guardrails placed on their work to be consistent and streamlined.

«We need, as an industry and as a country, one clear federal standard, whatever it may be,» Alexandr Wang, founder and CEO of the data company Scale AI, told lawmakers during an April hearing. «But we need one, we need clarity as to one federal standard and have preemption to prevent this outcome where you have 50 different standards.»

During a Senate Commerce Committee hearing in May, OpenAI CEO Sam Altman told Sen. Ted Cruz, a Republican from Texas, that an EU-style regulatory system «would be disastrous» for the industry. Altman suggested instead that the industry develop its own standards.

Asked by Sen. Brian Schatz, a Democrat from Hawaii, if industry self-regulation is enough at the moment, Altman said he thought some guardrails would be good, but, «It’s easy for it to go too far. As I have learned more about how the world works, I am more afraid that it could go too far and have really bad consequences.» (Disclosure: Ziff Davis, parent company of CNET, in April filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.)

Not all AI companies are backing a moratorium, however. In a New York Times op-ed, Anthropic CEO Dario Amodei called it «far too blunt an instrument,» saying the federal government should create transparency standards for AI companies instead. «Having this national transparency standard would help not only the public but also Congress understand how the technology is developing, so that lawmakers can decide whether further government action is needed.»

Concerns from companies, both the developers that create AI systems and the «deployers» who use them in interactions with consumers, often stem from fears that states will mandate significant work such as impact assessments or transparency notices before a product is released, Kourinian said. Consumer advocates have said more regulations are needed, and hampering the ability of states could hurt the privacy and safety of users.

A moratorium on specific state rules and laws could result in more consumer protection issues being dealt with in court or by state attorneys general, Kourinian said. Existing laws around unfair and deceptive practices that are not specific to AI would still apply. «Time will tell how judges will interpret those issues,» he said.

Susarla said the pervasiveness of AI across industries means states might be able to regulate issues such as privacy and transparency more broadly, without focusing on the technology. But a moratorium on AI regulation could lead to such policies being tied up in lawsuits. «It has to be some kind of balance between ‘we don’t want to stop innovation,’ but on the other hand, we also need to recognize that there can be real consequences,» she said.

Much policy around the governance of AI systems does happen because of those so-called technology-agnostic rules and laws, Zweifel-Keegan said. «It’s worth also remembering that there are a lot of existing laws and there is a potential to make new laws that don’t trigger the moratorium but do apply to AI systems as long as they apply to other systems,» he said.

Will an AI moratorium pass?

With the bill now in the hands of the US Senate — and with more people becoming aware of the proposal — debate over the moratorium has picked up. The proposal did clear a significant procedural hurdle, with the Senate parliamentarian ruling that it does pass the so-called Byrd rule, which states that proposals included in a budget reconciliation package have to actually deal with the federal budget. The move to tie the moratorium to states accepting BEAD funding likely helped, Winters told me.

Whether it passes in its current form is now less a procedural question than a political one, Winters said. Senators of both parties, including Republican Sens. Josh Hawley and Marsha Blackburn, have voiced their concerns about tying the hands of states.

«I do think there’s a strong open question about whether it would be passed as currently written, even though it wasn’t procedurally taken away,» Winters said.

Whatever bill the Senate approves will then also have to be accepted by the House, where it passed by the narrowest of margins. Even some House members who voted for the bill have said they don’t like the moratorium, namely Rep. Marjorie Taylor Greene, a key ally of President Donald Trump. The Georgia Republican posted on X this week that she is «adamantly OPPOSED» to the moratorium and that she would not vote for the bill with the moratorium included.

At the state level, a letter signed by 40 state attorneys general — of both parties — called for Congress to reject the moratorium and instead create that broader regulatory system. «This bill does not propose any regulatory scheme to replace or supplement the laws enacted or currently under consideration by the states, leaving Americans entirely unprotected from the potential harms of AI,» they wrote.

Technologies

Microsoft Is Getting Rid of Passwords in One Month. Here’s What You Need to Do ASAP

You’ll still be able to access your passwords, but Microsoft’s new approach is a safer way to log into your accounts.

If you rely on Microsoft Authenticator to store your passwords, time is winding down.

Starting in August, Microsoft will require you to use passkeys instead of keeping all of your Microsoft passwords on its mobile app and your old passwords will vanish.

But that’s not bad news. Passkeys can cut out risky password habits that 49% of US adults have, according to a recent CNET survey. Making it a practice to use the same password for multiple accounts or include personal hints, like your birthday, can be risky. It could be an easy giveaway for hackers to guess, which can lead to identity theft and fraud.

Here’s what you need to know about Microsoft’s timeline for the switch and how to set up passkeys for your Microsoft accounts before it’s too late.

Microsoft Authenticator will stop supporting passwords

Microsoft Authenticator houses your passwords and lets you sign into all of your Microsoft accounts using a PIN, facial recognition such as Windows Hello, or other biometric data, like a fingerprint. Authenticator can be used in other ways, such as verifying you’re logging in if you forgot your password, or using two-factor authentication as an extra layer of security for your Microsoft accounts.
In June, Microsoft stopped letting users add passwords to Authenticator, but here’s a timeline of other changes you can expect, according to Microsoft.

July 2025: You won’t be able to use the autofill password function.
August 2025: You’ll no longer be able to use saved passwords.

If you still want to use passwords instead of passkeys, you can store them in Microsoft Edge. However, CNET experts recommend adopting passkeys during this transition. «Passkeys use public key cryptography to authenticate users, rather than relying on users themselves creating their own (often weak or reused) passwords to access their online accounts,» said Attila Tomaschek, CNET software senior writer and digital security expert.

Why passkeys are a better alternative to passwords

So what exactly is a passkey? It’s a credential created by the Fast Identity Online Alliance that uses biometric data or a PIN to verify your identity and access your account. Think about using your fingerprint or Face ID to log into your account. That’s generally safer than using a password that is easy to guess or susceptible to a phishing attack.

«Passwords can be cracked, whereas passkeys need both the public and the locally stored private key to authenticate users, which can help mitigate risks like falling victim to phishing and brute-force or credential-stuffing attacks,» Tomaschek added.

Passkeys aren’t stored on servers like passwords. Instead, they’re stored only on your personal device. More conveniently, this takes the guesswork out of remembering your passwords and the need for a password manager.

How to set up a passkey in Microsoft Authenticator

Microsoft said in a May 1 blog post that it will automatically detect the best passkey to set up and make that your default sign-in option. «If you have a password and ‘one-time code’ set up on your account, we’ll prompt you to sign in with your one-time code instead of your password. After you’re signed in, you’ll be prompted to enroll a passkey. Then the next time you sign in, you’ll be prompted to sign in with your passkey,» according to the blog post.

To set up a new passkey, open your Authenticator app on your phone. Tap on your account and select «Set up a passkey.» You’ll be prompted to log in with your existing credentials. After you’re logged in, you can set up the passkey.

Technologies

Fortnite Players, You Have a New Chance to Get Money From a $245M Settlement. Here’s How to File

If you bought items in Fortnite between January 2017 and September 2022 and missed the January filing deadline, you might still be eligible for a share of the FTC settlement.

If you’re one of the Fortnite gamers who were deceived by Epic Games’ in-game purchase process, but you missed the October and January deadlines to file for compensation from a settlement, you’ve got another chance. The Federal Trade Commission has reopened the process for eligible claimants to get money back in the $245 million settlement related to the use of illegal tactics that boosted in-game sales.

Fortnite players charged for unwanted purchases between January 2017 and September 2022 who haven’t already filed now have until July 9, 2025, to participate in the settlement by filing a claim. The FTC says that since December, 629,344 payments went out to players who made those in-game purchases and who filed a valid claim by Oct. 8. The average payout was about $114 per customer and totaled $72 million.

Another round of settlement money is being distributed June 25 and June 26 via checks and PayPal on 969,173 claims for another $126 million in payouts, the FTC says.

In the settlement, the FTC concluded that Epic Games used design tricks known as dark patterns to make in-game sales. «Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button,» the agency said in its March 2023 announcement.

What’s changed?

The FTC apparently still has about $47 million left to distribute from the settlement. On June 25, the agency posted a notice alerting those who haven’t yet filed that they now have until July 9, 2025 to submit a claim at ftc.gov/fortnite.

The Fortnite settlement applies to anyone who was charged for in-game currency for items they did not want to purchase between January 2017 and September 2022; if a child made credit card charges without a parent’s knowledge between January 2017 and November 2018; or if an account was locked after a charge was disputed between January 2017 and September 2022.

Those filing must be 18 or older; minors can ask a parent or guardian to complete the form on their behalf.

One CNET staffer received his PayPal deposit (for $95.98) from a Fortnite claim in January, a pleasant surprise since he had forgotten about the settlement.

Epic’s Fortnite is wildly popular, especially with teens; in one game event last year, 44.7 million players participated on a single day. But the free-to-play game relies on players buying Battle Passes and other items with V-Bucks, the in-game currency.

Like other games-as-platforms that have a large audience of young people, such as Roblox, Fortnite has evolved on how to make its game secure for young people and to ensure that payments aren’t being generated without the player’s authorization.

How can I file a Fortnite claim?

When you visit the FTC’s Epic Games/Fortnite page to file a claim, you will be asked if you received a notification email from the FTC with a claim number. If you have a claim number, select Yes, click Next, then provide your claim number and solve a CAPTCHA test to submit your claim.

If you didn’t receive a notification or can no longer find your claim number, you can apply for a Fortnite claim using your Epic account ID. If you’re not sure of your Epic account ID, follow these steps from the Epic Games support page.

When and how will I receive my money from the FTC?

Eligible claims submitted by Oct. 8, 2024 and January have already started receiving payments from the FTC. The FTC has not specified when money for new claims filed by July 9 will be distributed.

During the claims process on the FTC site, you will be able to specify whether you’d like to be paid with a check or via PayPal. Checks must be cashed within 90 days, and PayPal payments must be accepted within 30 days. For questions about your payment, you can call a claims support hotline at 1-800-915-0880 or email admin@fortniterefund.com.

Will filing a claim against Epic Games affect my Fortnite account?

According to the FTC, filing a claim will not impact the status of a player’s Fortnite account. For more information, see the FTC’s Fortnite refunds FAQ.

Technologies

What Makes a Phone Ethical? I Talked With Someone Who Builds One to Find Out

CEO Raymond van Eck explains how the Fairphone 6 is better for people — including the people who make it — and better for the planet.

Fairphone is a David among Goliaths in the phone world. We’re talking about a tiny Dutch social enterprise that shipped just over 100,000 phones in 2023, versus tech giants such as Apple and Samsung, which routinely ship hundreds of millions of phones annually.

On Wednesday, Fairphone CEO Raymond van Eck unveiled the latest device, the sixth generation, in its family of phones. Intended to be known simply as the Fairphone (but in reality more likely to be referred to as the Fairphone 6), this modular phone is designed to be easily repairable and last people who buy it at least eight years.

I spoke with van Eck at the Amsterdam launch event, which took a different tack for a smartphone company. Instead of foregrounding the specs and AI capabilities, Fairphone talked mostly about how this newest device has the lowest carbon footprint of any phone it has made. Company reps also talked about how the workers in its supply chain are paid a living wage bonus and protected from harmful chemicals.

It’s not the easy or convenient way to make a phone. But if a phone maker as diminutive as Fairphone can do it, then it does raise the question of why industry mammoths can’t too.

«It takes effort,» van Eck tells me. «If we can do it, in my opinion, others can do it, because if you look at our scale, it’s even more difficult to convince suppliers to work this way.»

Niche phones are having something of a moment. Just last week the Trump Organization announced the T1 device, also known as the Trump phone, expected later this year, with much boasting of American origins. But rather than a preoccupation with making phones in the US, which doesn’t have the supply chain or manufacturing capabilities, I’d much rather see more options that present people with more ethically made, more easily repairable devices. I’ve been covering consumer tech and the climate crisis for many years, and not only do phones such as the Fairphone provide people with better value for the money in the long run, but they also put less stress on our rapidly warming planet.

Fairphone’s slice of the market is a small one, and van Eck is aware of that fact. But the company is also making an impact through its role in setting up systems that the entire tech industry can take advantage of. He cited progressive approaches focused on the use of minerals in mobile phone manufacturing like the Fair Cobalt Alliance and responsible gold credits (through which companies pay an extra $1 per every gram of gold mined in order to fund oxygen masks and other safety equipment).

A fairer phone

Then of course there’s the Fairphone itself — a device designed to be easily repairable by anyone who owns it, regardless of skill level. It even comes with a dedicated iFixit screwdriver in the box so that you can replace the back panel.

Inside is Qualcomm’s Snapdragon 7s Gen 3 chip — a solid processor, but not the company’s most sophisticated silicon. I can’t help but wonder whether Fairphone is potentially shaving years off the phone’s longevity by not using the most advanced chipset at the time the device is manufactured. But van Eck thinks not.

«The device is perfectly equipped to fulfill the needs of the customers that are buying it,» he says. The Fairphone is designed for longevity via repair and updates, not to compete with future flagship models of competitors, he adds. «Within this midrange, we’re very confident that we can still deliver to the expectations of the customers in the years to come.»

One of the more notable (and noticeable) features of the Fairphone 6 is a lime green slider on the side of the phone. There’s been something of a renaissance of physical buttons on phones over the past few years, but most phone makers install these primarily for activating a device’s AI features.

I was fascinated to see that Fairphone has gone practically in the opposite direction. The slider is customizable, but comes pre-programmed to switch the phone into «essentials» mode. This pared-back monochrome interface gives you access to just the core functions of your phone — messaging, camera, web browser and the like — to give you something more akin to a dumb phone experience.

It’s not that van Eck is against AI. The Android version of the Fairphone 6 will come with Google’s Gemini. But he’s also aware of the wider conversation around responsible phone us.

«We see debates about children’s smartphones. We see debates about people who are glued to their devices even having eye problems,» he says. «It’s actually in our mission … that we want to make tech ethical. So it’s also good for us to help our users to switch off.»

When ethics meet scale

Worthy though its ideals and practices may be, this doesn’t mean Fairphone is totally above criticism.

If you’ve followed the company’s journey as closely as I have, it’s impossible not to have seen an influx of negative customer experience reports over the past few months, especially complaints about wait times and lack of communication.

Fairphone’s growth has been both a blessing and a curse, according to van Eck, who puts the issues the company has experienced down to systems, processes and workforce that have now been resolved.

«We see more interest for our devices, and that also triggered the fact that we needed to scale up,» he says. «We expect that the longer waiting times that customers have experienced, that will be a thing from the past within the next few weeks.»

Crucially, people who are interested in buying a Fairphone 6 shouldn’t see a repeat of these issues. This is the sixth-generation device, rebranded without a number officially attached to it. Does that mean this ultimate Fairphone is therefore the last Fairphone?

It is not. «We’re here to stay,» he tells me. Not only will Fairphone continue developing its tech, but it will keep pushing for and holding itself to higher standards. The new device contains more recycled materials than the Fairphone 5, for example.

«Of course there will be next versions to come,» he says. «But for now, we’re very happy with the Fairphone.»