AI Labelling Becomes Mandatory in the EU for Companies

New European Union rules requiring companies to disclose certain AI-generated content took effect on Sunday 2 August 2026, bringing the transparency provisions of the EU AI Act into force across the bloc. The obligations, set out in Article 50 of Regulation (EU) 2024/1689, apply to businesses that build generative AI systems and to those that use them, and breaches can be penalised by fines of up to 15 million euros or 3% of worldwide annual turnover.

What the rules require

Article 50 covers four situations. Companies must tell people when they are dealing with an AI system such as a chatbot, must disclose deepfake images, audio or video, must flag AI use in emotion-recognition or biometric-categorisation systems, and must disclose AI-generated text that is published to inform the public on matters of public interest. Separately, the providers of generative systems must mark synthetic audio, image, video and text in a machine-readable format so it can be detected as artificial.

The European Commission published guidelines in 2026 setting out how the obligations should be met, including a requirement that any disclosure be clear, distinguishable and accessible, and presented no later than the first time a person interacts with the content.

The exemption most coverage missed

The rules are narrower than the phrase mandatory AI labels suggests. The obligation on AI-generated text does not apply where the text has been through human editorial review and a person or organisation holds editorial responsibility for publishing it. In practice, ordinary newsroom and editorial sign-off satisfies the requirement, meaning much professionally produced content is already compliant without adding a visible label.

The Commission's guidance also exempts clearly artistic, satirical or fictional works from full deepfake labelling, requiring only that the artificial nature be indicated in a way that does not spoil the work.

A deadline that already moved

One part of the regime has been delayed. Under a provisional agreement reached between the Council and the European Parliament on 7 May 2026 as part of the Digital Omnibus package, the machine-readable marking obligation in Article 50(2) will not apply until 2 December 2026 for systems that were already on the market before 2 August 2026. The postponement, agreed under pressure from industry, means the most technical requirement was pushed back before the headline deadline arrived.

What happens next

Enforcement falls to national market-surveillance authorities, several of which are still being designated and resourced across member states. Businesses operating in the EU are being advised by law firms including Sidley, Stibbe and Herbert Smith Freehills Kramer to map their content against the four Article 50 categories, confirm that public-interest material carries a named editorial owner, and preserve provenance metadata on AI-generated media. For most publishers, the practical task is documenting who reviewed what, rather than attaching disclaimers to everything.