EU kicks off landmark AI law enforcement as first batch of restrictions enter into force

The European Union formally kicked off enforcement of its landmark artificial intelligence law Sunday, paving the way for tough restrictions and potential large fines for violations.

The EU AI Act, a first-of-its-kind regulatory framework for the technology, formally entered into force in August 2024.

On Sunday, the deadline for prohibitions on certain artificial intelligence systems and requirements to ensure sufficient technology literacy among staff officially lapsed.

That means companies must now comply with the restrictions and can face penalties if they fail to do so.

The AI Act bans certain applications of AI which it deems as posing "unacceptable risk" to citizens.

Those include social scoring systems, real-time facial recognition and other forms of biometric identification that categorize people by race, sex life, sexual orientation and other attributes, and "manipulative" AI tools.

Companies face fines of as much as 35 million euros ($35.8 million) or 7% of their global annual revenues — whichever amount is higher — for breaches of the EU AI Act.

The size of the penalties will depend on the infringement and size of the company fined.

That's higher than the fines possible under the GDPR, Europe's strict digital privacy law. Companies face fines of up to 20 million euros or 4% of annual global turnover for GDPR breaches.

It's worth stressing that the AI Act still isn't in full force — this is just the first step in a series of many upcoming developments.

Tasos Stampelos, head of EU public policy and government relations at Mozilla, told CNBC previously that while it's "not perfect," the EU's AI Act is "very much needed."

"It's quite important to recognize that the AI Act is predominantly a product safety legislation,"