First Portions of EU AI Act Take Effect

by Zachary Barlow

February 4, 2025

The first phase of the EU’s new AI legislation takes effect this month and bans certain AI systems from EU markets. This ban is the first in a series of phased-in obligations leading to full implementation by August 2026. The ban prohibits eight types of AI systems. The EU found that these systems are discriminatory, intrusive, or pose an unacceptable safety risk. A recent memo from Litter outlines the eight types of banned AI systems as:

  1. “AI systems that manipulate individuals’ decisions subliminally or deceptively, causing or reasonably likely to cause significant harm.
  2. AI systems that exploit vulnerabilities like age, disability, or socio-economic status to influence behavior, causing or reasonably likely to cause significant harm.
  3. AI systems that evaluate or classify individuals based on their social behavior or personality characteristics, causing detrimental or unfavorable treatment.
  4. AI systems that assess or predict the risk of an individual committing a criminal offence based on their personality traits and characteristics.
  5. AI systems that create or expand facial recognition databases through untargeted scraping of facial images from the internet or CCTV footage.
  6. AI systems that infer emotions in workplaces or education centers (except where this is needed for medical or safety reasons).
  7. AI systems that categorize individuals based on their biometric data to infer their race, political opinions, trade union membership, religious or philosophical beliefs, sex life or sexual orientation.
  8. AI systems that collect ‘real time’ biometric information in publicly accessible spaces for the purposes of law enforcement (except in very limited circumstances).”

This law applies to all companies offering AI systems on the EU market, including those based outside the EU. Penalties for violation amount to up to €35 Million or 7% of the company’s annual turnover, whichever is higher. Given the stakes, companies offering AI products in the EU should ensure compliance with these new provisions.