EU AI Act enters new phase with transparency and labeling mandates

A new phase of the European Union’s Artificial Intelligence Act (AI Act) entered into force on August 2, 2026, introducing strict transparency and labeling obligations. The regulation requires providers and users to clearly disclose when content is AI-generated or manipulated, such as deepfakes, to combat disinformation. Technical solutions like digital watermarking and machine-readable metadata are being implemented by companies like Anthropic to ensure traceability.

The regulatory shift has significant implications for various sectors. In the banking industry, institutions like Banco Santander are accelerating AI integration for credit scoring, fraud detection, and customer service, even as the AI Act classifies certain financial assessment tools as high-risk. In education, the Act mandates AI literacy for staff to ensure responsible use of digital tools.

The scope of the AI Act is extraterritorial, meaning it affects non-EU entities, such as companies in Chile, if their AI systems or results impact the European market. Non-compliance carries heavy financial penalties, with fines reaching up to 35 million euros or 7% of a company’s global annual turnover, depending on the specific violation.