EU AI Act Sets Fines Up to 35M EUR or 7% of Turnover From August 2026

The EU AI Act introduces a three-tier penalty system under Article 99, with fines ranging from 7.5 million EUR to 35 million EUR or 1% to 7% of global annual turnover, depending on the nature of the violation. The steepest penalties apply to prohibited AI practices, while lower tiers cover high-risk system obligations, transparency failures, and the supply of misleading information to authorities. For each violation, companies face whichever is higher — the fixed euro amount or the turnover-based percentage. The European AI Office is set to begin enforcement on August 2, 2026, initially using a graduated approach involving information requests and corrective orders before imposing financial penalties. However, intentional non-compliance or failure to cooperate could trigger direct penalty proceedings, with factors such as repeat violations and evidence concealment able to increase the final fine amount.