EU AI Act fines and enforcement for Article 50 labelling

The ceiling in Article 99 of the AI Act

For the transparency duties in Article 50, Article 99(4)(g) of the AI Act applies: up to EUR 15 million or, for companies, up to 3 % of total worldwide annual turnover in the preceding financial year, whichever is higher.

For SMEs, including start-ups, the lower amount applies (Article 99(6)), and since the Digital Omnibus the same goes for small mid-cap enterprises (Article 99(6a), inserted by Regulation (EU) 2026/1744). Commission Recommendation 2003/361/EC defines what an SME is:

Small mid-caps are businesses that have outgrown these limits (Recommendation (EU) 2025/1099).

A worked example

A store with EUR 2 million in annual turnover is an SME. The lower of EUR 15 million and 3 % of its turnover applies, which is EUR 60,000. That is the ceiling. The authority sets the actual amount case by case.

How the amount is set

Whether to fine and how much depends on the circumstances in Article 99(7). For retailers these matter most:

• the nature, gravity and duration of the infringement and its consequences (point (a))
• the degree of cooperation with the authority to remedy the infringement (point (f))
• the degree of responsibility, taking into account the technical and organisational measures in place (point (g))
• how the infringement became known, in particular whether the company reported it (point (h))
• intent or negligence (point (i))
• any action taken to mitigate harm to the people affected (point (j))

Alongside fines, Article 99(1) provides for warnings and non-monetary measures. Member States take into account the interests of SMEs and small mid-caps and their economic viability. According to the guidelines, measures under the Code of Practice can count as mitigating factors (para. 149), and authorities may ask deployers about their labelling practice (para. 148). A template for your internal procedure is under disclosure statement and procedure.

Who is in charge in Germany

The German AI Market Surveillance Act (KI-MIG) has applied since 29 July 2026. The Bundesnetzagentur is the market surveillance authority (Section 2(1) KI-MIG). Media service providers acting for journalistic or advertising purposes fall to regional authorities (Section 2(8)). In our reading, an ordinary online store is not one of them.

Article 50 is not part of the KI-MIG's own list of fines, so infringements are sanctioned directly under Article 99 of the AI Act. The procedure follows the German Administrative Offences Act by analogy (Section 16(1) KI-MIG), and the market surveillance authority acts as the administrative authority (Section 17(1)). According to the explanatory memorandum, negligence is sufficient. In its slides of 9 September 2026, the Bundesnetzagentur states that Article 50 already applies and has been enforced since the KI-MIG came into force.

Complaints office

Anyone who suspects an infringement, including of transparency duties, may complain to the market surveillance authority (Article 85 AI Act). In Germany the Bundesnetzagentur is the central complaints office (Section 8 KI-MIG). Complaints are free of charge and have no deadline or formal requirements, but can only be filed through the authority's online form, not by email. Since 28 July 2026 the Wettbewerbszentrale, a German self-regulatory body for fair competition, has also run its own AI complaint form.

Authorities in other EU countries

The Commission keeps a list of the market surveillance authorities designated by Member States. An asterisk means the designation is still awaiting final adoption. The list lags behind in places; Germany still carries an asterisk although the KI-MIG is in force.

More countries, including laws outside the EU, are covered in AI labelling worldwide.

German competition law: who can send a warning letter

Besides the authority, Germany's Act against Unfair Competition (UWG) can come into play, usually as an Abmahnung, a formal warning letter demanding a cease-and-desist declaration. No court has ruled on Article 50 yet; the points below reflect the prevailing view in the legal literature.

• Section 3a UWG, breach of a statutory rule. According to the guidelines, Article 50(4) also protects consumers against deception (para. 9), which supports treating it as a rule governing market conduct. Several commentators take this view, and we found none arguing the opposite. Whether a breach is significant enough remains a case-by-case question.
• Section 5 UWG, misleading practices. An image that shows your product differently from reality can be misleading regardless of any label. Images expressly count as statements (Section 5(4)), and a label does not cure this (guidelines para. 129, recital 137 AI Act).
• Sections 5a and 5b(4) UWG, withholding information. Whether AI origin is material information under these provisions is open. For images that shape the impression of a product, it is conceivable.

Under Section 8(3) UWG, competitors, registered trade associations, qualified consumer associations and chambers of commerce may take action. For breaches of statutory labelling duties in e-commerce, competitors cannot claim the costs of a warning letter (Section 13(4) no. 1 UWG). It is likely, but undecided, that Article 50(4) counts as such a duty. In that case, a first warning from a competitor also cannot be combined with an agreed contractual penalty if you usually employ fewer than 100 people (Section 13a(2) UWG). These limits do not apply to associations.

Representative actions

Article 110 of the AI Act added the Regulation to Annex I of the Representative Actions Directive (Directive (EU) 2020/1828), applicable since 27 July 2026. Germany's Injunctions Act (UKlaG) does not yet list the AI Act among its consumer protection laws (Section 2(2) UKlaG), but that list is not exhaustive. Whether a court will treat Article 50 as a consumer protection rule is open. Action under the UWG is more likely.

Enforcement so far

Up to 3 October 2026 we found no published Article 50 case in Germany, whether warning letter, judgment or measure by the Bundesnetzagentur. This is a result of our research, not proof that no proceedings exist.

Sensible steps

1. Classify your AI images, for example with the labelling check, and label deep fakes wherever they appear.
2. Record who decided, with what result and which citation. That counts under Article 99(7)(g).
3. Offer a way to report labelling errors and fix reported errors promptly.
4. Cooperate if an authority contacts you (point (f)).
5. Have a lawyer review any warning letter before you sign a cease-and-desist declaration.