European Parliament Passes Landmark AI Act with Strict Rules and Hefty Fines
The European Parliament adopts the world's first comprehensive legal framework for artificial intelligence, establishing strict data quality, transparency, and accountability requirements. The new law carries massive penalties and forces companies worldwide to quickly adapt their products to comply.
The European Parliament adopts the Artificial Intelligence Act, establishing the world's first comprehensive horizontal legal framework for AI. This groundbreaking legislation sets EU-wide rules regarding data quality, transparency, human oversight, and accountability for artificial intelligence systems.
The AI Act carries severe consequences for non-compliance, including fines of up to 35 million euros or 7% of a company's global annual revenue. Because of these significant penalties and the law's extraterritorial reach, a vast number of companies doing business in the European Union face a profound impact on their operations.
The legislation enters into force 20 days after its expected publication in the Official Journal in May or June 2024, with a phased rollout for different provisions. Prohibitions on certain AI systems take effect after six months, rules for generative AI apply after 12 months, and most remaining requirements become applicable after two years, prompting an immediate need for affected businesses to begin redesigning their products.