There’s been a lot of confusion and panic this week about “huge fines”, “drastic measures” and “sweeping new AI rules” in the EU. In reality, it’s a lot more narrow — and a lot more sensible. And mostly it’s about making AI more obvious when it actually needs to be obvious — especially for AI-generated content.
Starting from August 2, 2026, AI labelling is a legal requirement for any company that serves EU citizens. And similar to the European Accessibility Act, it’s not limited to EU companies. It affects any company worldwide with EU operations as long as their AI output is used by people in the EU.
The EU’s transparency obligations for AI systems took effect on 2 August 2026. Official statement by European Commission.
What Actually Needs Labelling
The goal of AI labelling is to help everyone exposed to AI content to recognize, in a clear and distinguishable way, that the content has been artificially generated or manipulated.
According to Article 50(4) of the AI Act, AI labelling applies to:
- Deepfakes. Any image, audio, or video that resembles a real person, object, place, or event and would falsely appear authentic or truthful. Content that is not deceptively realistic generally doesn’t apply.
- Chatbots and AI agents. Users must be informed if they’re not talking to a human.
- Fully AI-written text. Specifically on matters of public interest, where there has been no human review or editorial work.
- Emotion recognition and biometric categorization tools.
Both providers (who build or supply the AI system) and deployers (who use it) carry legal obligations. Similar to GDPR and the European Accessibility Act, a company doesn’t escape Article 50 just because it licensed an external AI tool from a third party.
However, this does not mean that all AI-generated content must be explicitly labelled.
Sparkles everywhere in AI products — but they don’t always communicate what exactly is AI-generated and what isn’t.
Not All AI-Generated Content Must Be Labelled
Beyond the use cases above, pretty much everything else — the vast majority of AI-assisted work — simply isn’t covered by the new transparency rules. Most notably, the disclosure obligation does not apply where the AI-generated text has been reviewed and edited by a human, with a named person or entity taking editorial responsibility for it.
Some confusion circles around what exactly “public interest” means, where it starts and where it ends. On its own, it refers to health, safety, environment, economy, finances, politics, science, or culture. If AI-generated product claims touch upon any of these areas, the disclosure rule applies.
Some law firms recommend labelling realistic AI-generated illustrations or photos as a precaution for advertising, marketing, and other commercial content. AI-generated product illustrations, photos, or posters do need a disclosure, as long as they resemble a real person, place, object, or event.
Carbon’s AI label in context within a complex data dashboard. (Image source: Carbon Design System)
AI label placement examples across different interface components. (Image source: Carbon Design System)
The Fine Line Between “Edited” and “AI-Generated”
At which point does edited AI content stop being AI content? When a form is pre-filled with AI but then a user edits it, is it still AI? The EU Commission’s guidance is a little fuzzy. Small assistive edits — spellcheck, grammar, formatting, cropping, colour correction, and AI-generated translation — don’t count as AI generation.
AI-generated summaries, composite imagery, substantive rewrites, or adding and removing elements from a photo are considered AI generation. In practice, fine-tuning a sentence a person wrote is acceptable, but generating the substantive content itself requires disclosure under the new rules.
