The European Union (EU) has officially started enforcing its landmark artificial intelligence (AI) law – AI Act – setting the stage for strict regulations and potentially hefty fines for non-compliance by AI players, including tech giants like OpenAI, Microsoft, Google and Facebook-parent company Meta.
The EU AI Act, the first comprehensive regulatory framework of its kind for AI technology, formally came into effect in August 2024. February 2 marked the deadline for prohibitions on specific AI systems and the implementation of requirements for ensuring adequate technology literacy among staff.
This essentially means that AI companies operating within the EU must now adhere to the Act’s restrictions or face penalties.
What does the EU’s AI Act says
The AI Act prohibits certain AI applications deemed to pose an “unacceptable risk” to EU citizens. These banned applications include social scoring systems, real-time facial recognition and other forms of biometric identification that categorize individuals based on race, sex life, sexual orientation, and other sensitive attributes, as well as “manipulative” AI tools.
Companies found in breach of the EU AI Act could face fines of up to 35 million euros ($35.8 million) or 7% of their global annual revenue, whichever amount is greater.
Why EU’s AI Law is significant
The EU’s AI Law is stricter in the sense that the potential penalties exceed those possible under the General Data Protection Regulation (GDPR), Europe’s stringent digital privacy law. GDPR breaches can lead to fines of up to 20 million euros or 4% of annual global turnover.
Notably, the AI Act has not yet come into full effect. By August 2026, its regulations will generally apply to companies operating within the EU. However, developers of certain “high-risk” AI systems will have up to 36 months, until August 2027, to comply with requirements related to risk assessment and human oversight.
