European Union: Adopted AI Act including prohibition of AI systems posing "unacceptable risk" by Council

On 21 May 2024, the Council of the European Union adopted the regulation laying down harmonised rules on Artificial Intelligence (Artificial Intelligence Act). The Act includes a ban on AI systems posing "unacceptable risk". The ban is applicable to cognitive behavioural manipulation, the untargeted scrapping of facial images from the internet or CCTV footage, emotion recognition in the workplace and educational institutions, social scoring, biometric categorisation to infer sensitive data, such as sexual orientation or religious beliefs, and some cases of predictive policing for individuals. The AI Act exempts systems exclusively used for military or defence purposes and those employed solely for research, innovation, or non-professional personal use. In terms of enforcement, the AI Act introduces fines for violations, calculated as a percentage of the offending company's global annual turnover. The fines are tiered, EUR 35 million or 7% for prohibited AI applications, EUR 15 million or 3% for violations of the Act's obligations, and EUR 7.5 million or 1.5% for supplying incorrect information. The Act will come into effect 20 days following its publication in the Official Journal and will be implemented 24 months after it enters into force. Chapters I and II will apply 6 months after the Act's effective date. Chapter III Section 4, Chapter V, Chapter VII, Chapter XII, and Article 78 will be implemented 12 months after the Act comes into effect.