EU To Implement New AI Regulations, With Fines Up To EUR 35 Million, Starting Next Month. Here's What They Will Bring To The Table

Penalties for non-compliance with the AI Act are substantial, with fines ranging from 7.5 million euros to 35 million euros.

The new AI regulations are scheduled to take full effect in 2026.

Source : ABP Live AI

Starting next month, the European Union will implement landmark artificial intelligence (AI) regulations following the formal endorsement by EU member states on Tuesday. This move solidifies a political agreement achieved in December and aims to establish a global benchmark for AI technology, which is becoming increasingly integral to both business and everyday life.

The EU's AI Act is set to be one of the most comprehensive AI regulatory frameworks worldwide, distinguishing itself from the United States' more lenient voluntary compliance strategy and China's stringent control measures designed to uphold social stability.

Significant Amendments Over 2 Years

This decision comes after EU lawmakers approved the AI legislation, originally proposed by the European Commission in 2021, incorporating significant amendments over the past two years. The legislation responds to growing international concerns about AI's role in spreading misinformation, generating fake news, and infringing on copyrighted material. These concerns have been magnified by the rise of generative AI systems like OpenAI’s ChatGPT, supported by Microsoft, and Google’s chatbot Gemini.

Belgian Minister for Digitisation, Mathieu Michel, highlighted the importance of the new law, stating, "This landmark law, the first of its kind in the world, addresses a global technological challenge that also creates opportunities for our societies and economies," Michel emphasised that the AI Act underscores the values of trust, transparency, and accountability, ensuring that while AI technology evolves rapidly, it also promotes innovation within Europe.

Real-Time Biometric Surveillance Restricted

The AI Act introduces stringent transparency requirements for high-risk AI systems, although the demands on general-purpose AI models are somewhat less severe. Notably, the legislation restricts the use of real-time biometric surveillance in public spaces by governments, confining it to the investigation of certain crimes, prevention of terrorist activities, and locating suspects involved in serious offences.

Legal expert Patrick van Eecke from the law firm Cooley noted the extensive reach of the AI Act, predicting its influence beyond the EU's borders. "The Act will have global reach. Companies outside the EU that utilize EU customer data in their AI platforms will need to comply. Other countries and regions are likely to use the AI Act as a blueprint, just as they did with the GDPR," he explained, referring to the EU's stringent privacy regulations.

The new regulations are scheduled to take full effect in 2026. However, specific prohibitions, such as bans on AI applications in social scoring, predictive policing, and the indiscriminate collection of facial images from the internet or CCTV footage, will be enforced six months after the regulation takes effect. General purpose AI models will have to adhere to the new obligations within 12 months, and AI systems embedded in regulated products must comply within 36 months.

Penalties for non-compliance with the AI Act are substantial, with fines ranging from 7.5 million euros ($8.2 million) or 1.5 per cent of a company's turnover to 35 million euros or 7 per cent of global turnover, depending on the severity of the violation.