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EU Begins Enforcement of Groundbreaking AI Law with New Restrictions and Penalties

Prime Highlights: 

The European Union has officially started enforcing its landmark AI Act, with new restrictions and requirements coming into effect on February 2, 2025. 

The Act bans high-risk AI applications, including social scoring systems, real-time facial recognition, and biometric identification technologies that categorize people based on sensitive attributes like race or sexual orientation. 

Key Background: 

The European Union has formally launched the enforcement of its groundbreaking artificial intelligence (AI) regulations, marking a significant step toward addressing the challenges posed by the rapidly advancing technology. The EU AI Act, which was officially enacted in August 2024, is the first comprehensive regulatory framework globally to address AI-related risks. 

As of Sunday, February 2, 2025, the deadline for prohibitions on certain high-risk AI applications and the requirement for organizations to ensure adequate technology literacy among employees has passed. This means companies are now obligated to comply with the restrictions or face potential penalties. The law bans specific AI technologies deemed to pose an “unacceptable risk” to citizens, including social scoring systems, real-time facial recognition, and certain forms of biometric identification that categorize individuals based on sensitive personal attributes such as race, sexual orientation, or gender. 

Organizations found in violation of the EU AI Act may face hefty fines, which could reach up to 35 million euros ($35.8 million) or 7% of their global annual revenue, whichever is higher. These penalties exceed those stipulated under the EU’s General Data Protection Regulation (GDPR), which allows fines up to 20 million euros or 4% of annual turnover for privacy violations. 

While the AI Act is now in its initial phase, experts stress that this is just the beginning. Further developments, including additional guidelines, risk assessments, and standards, are expected as part of the ongoing evolution of the regulatory framework. Critics, including some tech leaders, have raised concerns that the regulations may stifle innovation. However, supporters argue that the EU’s approach could establish Europe as a global leader in developing trustworthy AI systems that prioritize safety and ethical considerations. The EU’s AI Act, while not without challenges, has set the stage for future legislation, potentially influencing AI regulatory models worldwide.