EU AI Act Transparency Rules Effective August 2: Firms Must Label AI Content or Face €15 Million Fine

From August 2, the European Union is applying the transparency obligations under its Artificial Intelligence Act, requiring providers of AI systems that interact with users or generate or process content to inform users explicitly. This applies to businesses using AI technologies such as customer service chatbots or call centers that use machine learning to analyze call sentiment, which must state this at the start of each interaction. The new rules have a broad scope. Advertising and corporate social media content that uses deepfake technology must carry an AI-generated label. AI applications used for business purposes, including scheduling, contacting clients or negotiating contracts, must also be clearly disclosed. Companies that breach the rules face fines of up to 15 million euros or 3% of their global annual turnover, whichever is higher. AI model developers are also subject to the new requirements and will be overseen by the European Commission's newly established AI Office. Their compliance obligations take effect from August 2, 2026.