EU Enforces AI Act For Strict Regulations And Hefty Fines For Non-Compliance

EU Enforces AI Act For Strict Regulations And Hefty Fines For Non-Compliance

Strap – It is sterner than the General Data Protection Regulation

The European Union (EU) has begun enforcing its landmark Artificial Intelligence Act for strict regulations and potentially hefty fines for non-compliance by artificial intelligence (Al) players, including tech giants like OpenAI, Microsoft, Google and Facebook-parent company Meta.

The Act, the first comprehensive regulatory framework of its kind for Al technology, came into effect in August 2024. The deadline of 02 February prohibited specific Al systems and the implementation of requirements for ensuring adequate technology literacy.

Thus, the Al companies operating within the EU, must now adhere to the Act's restrictions or face penalties.

It prohibits certain Al applications that pose an ‘unacceptable risk’ to EU citizens. The banned applications include social scoring systems, real-time facial recognition and other forms of biometric identification categorizing individuals based on race, sex life, sexual orientation, and other sensitive attributes and ‘manipulative’ Al tools.

The companies breaching the rules could face fines of up to 35 million euros ($35.8 million) or 7 percent of their global annual revenue, whichever amount is greater.

The law is stricter, as the potential penalties exceed those 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 percent of the company’s annual global turnover.

While the AI Act is not yet fully effective, by August 2026, its regulations will apply to companies within the EU.

However, developers of certain ‘high-risk’ Al systems will have up to 36 months (until August 2027), to comply with requirements related to risk assessment and human oversight.