Commercially Connected shorts - 22 July 2026

This week we look at:

• Online safety - UK government unveils further online safety measures for children
• AI - EU Commission publishes transparency guidelines ahead of August 2026 obligations
• Supply Chain – building resilience into contracts
• UK Right to Work Scheme expansion – how might this impact commercial contracts?

UK government unveils further online safety measures for children

On 15 July 2026, the UK Government (under Sir Keir Starmer) announced new online safety measures and published its response to the Growing Up in the Online World consultation, setting out the next phase of reforms to strengthen protections for children online. The measures build on the previously announced ban on social media services being offered to under-16s.

Key proposals include:

• New default protections for 16 and 17-year-olds using social media, including overnight access restrictions between midnight and 6am, muted overnight notifications, and autoplay and personalised feeds switched off by default. Young people will be able to opt out of these settings

• Additional safeguards for AI chatbots, including mandatory breaks for under-18s and potential action against services providing harmful or unverified mental health advice

• Measures to tackle circumvention of age-based protections, including further Ofcom research and expectations on service providers to detect and prevent underage access. The Government has ruled out age-gating or banning VPNs for now

• Expanded support for parents, schools and children through media literacy initiatives, updated screen-use guidance and statutory mobile phone-free school policies

Online platforms, AI developers, gaming providers and other digital services should expect additional regulatory obligations around age assurance, safety-by-design measures, child user protections and platform governance. Businesses serving or accessible to children should review product features, age-verification processes and AI risk management frameworks in anticipation of further regulations. The indicative timeline (which will need confirmation under the Andy Burnham led Government) is:

• October 2026 – Ofcom age assurance assessment

• End of 2026 – First social media restrictions regulations

• Spring 2027 – Social media restrictions in force

For more on the background to these developments see: UK: Social media ban for under 16s — implications for platform operators and age assurance

EU AI Act: Commission publishes transparency guidelines ahead of August 2026 obligations

On 20 July 2026, the European Commission published final guidance to help providers and deployers of certain AI systems comply with the AI Act's transparency requirements, which start to apply from 2 August 2026. The guidance clarifies when organisations must inform users that they are interacting with AI, and when AI-generated or AI-manipulated content must be labelled.

Key points include:

• Providers of AI systems (such as chatbots and AI agents) must ensure users are informed when they are interacting directly with AI

• AI-generated or manipulated content must include machine-readable markers to support detection

• Deployers must disclose the use of deepfakes, certain AI-generated content on matters of public interest, and emotion recognition or biometric categorisation systems

• The guidance provides examples, exemptions and practical compliance measures, including reliance on the Commission-backed voluntary Code of Practice on Transparency of AI-Generated Content

Our colleague Robbert Santifort comments: “The publication of these guidelines removes much of the uncertainty around the AI Act’s transparency requirements. Businesses should use this clarity to turn AI governance commitments into practical, demonstrable compliance.”

Chain Reaction: Your Supply Chain Contracts Weren’t Built for This

Government initiatives, published reports and market research have collectively identified the key pressure points in supply chains and confirmed what is now top of the commercial agenda for businesses when it comes to risk mitigation. Legacy contracts, many drafted on pre-2020 assumptions, are ill-equipped to respond to the demands and complexities of today’s commercial landscape.

Our top tips include:

• Review your top 20 supply agreements for tariff exposure
• Stress-test provisions against current geopolitical scenarios—not hypothetical ones
• Map exit exposure across legacy relationships before restructuring
• Audit new supplier onboarding for sanctions, ESG, cyber security, and regulatory compliance gaps
• Map out your risk exposure from your position in the supply chain and assess impact of knock-on effects of economic shocks
• UK wise, monitor developments from the new Supply Chain Centre—its 14-point action plan and risk intelligence may provide early warning of sector-specific vulnerabilities and support for resilience planning

For more, see our first edition of Industrials Unpacked where we examine supply chain resilience, highlighting the legal and commercial risks facing businesses and the practical steps organisations can take to strengthen their contractual and operational frameworks.

UK Right to Work Scheme expansion – how might this impact commercial contracts?

The Border Security, Asylum and Immigration Act 2025 (BSAI 2025) extends mandatory RTW checks beyond traditional employees to a much wider range of working arrangements, including:

• Workers engaged under a worker's contract.

• Individual sub-contractors.

• Workers provided through online matching services.

A new extended liability regime under section 15A of the Immigration, Asylum and Nationality Act 2006 means that civil penalty liability can now pass upstream in a chain of contracts where the direct employer cannot be identified or prescribed requirements have not been met. Penalties remain up to £60,000 per illegal worker, and there are also significant reputational consequences for organisations.

Implications for commercial contracts?

An updated draft Code of Practice and a draft Employers’ Guide (published on 16 July 2026) prescribe specific contractual terms that must be in place before work commences to establish a statutory excuse against extended liability. These include:

• A requirement on the downstream employer/service provider to conduct prescribed RTW checks

• A prohibition on further subcontracting without prior written consent, with equivalent RTW obligations replicated in any permitted subcontracting

• Audit rights permitting the upstream party to inspect RTW compliance

• Enforcement provisions (including suspension/termination) triggered by illegal working where no statutory excuse exists

• Cooperation obligations with Home Office investigations, including disclosure of the chain of contracts, party details, and company registration information

Additionally, where contracts contain substitution clauses, employers must implement controls to ensure RTW checks are carried out on any substitute before work commences. Existing commercial contracts involving labour supply, outsourcing, or managed services should be reviewed and updated.

To understand more see: Expansion of the UK Right to Work Regime

With thanks to Emma Allchurch, Emily Hasted, Audrey Elliott, Nerya Ireland and Louisa Cole.