The three-tier fine structure under Article 99, who enforces what, and the mechanics of an investigation.
Educational content, not legal advice. AI regulation is fast-moving and jurisdiction-specific. Verify every obligation and deadline against the primary legal text and consult qualified counsel before making compliance decisions. Accurate as of the research date shown in the metadata below.The three fine tiers
Penalties for AI systems sit in Article 99. Member States set their own penalty regimes within ceilings the Regulation fixes, and the ceilings are tiered by the seriousness of the breach. For undertakings, the fine is the higher of the fixed euro amount or the stated percentage of total worldwide annual turnover for the preceding financial year.
| Tier | Ceiling | What triggers it |
|---|---|---|
| Prohibited practices | Up to 35,000,000 EUR or 7% of worldwide annual turnover | Breach of the Article 5 prohibitions (e.g. social scoring, certain biometric categorisation, manipulative or exploitative systems). |
| Other obligations | Up to 15,000,000 EUR or 3% of worldwide annual turnover | Most other breaches by providers, deployers, importers, distributors and notified bodies, including the high-risk requirements. |
| Incorrect information | Up to 7,500,000 EUR or 1% of worldwide annual turnover | Supplying incorrect, incomplete or misleading information to notified bodies or competent authorities. |
The SME rule inverts the maths. For SMEs and startups, each ceiling is the LOWER of the euro amount or the percentage, not the higher, deliberately softening the impact on smaller operators.GPAI model providers have their own regime. Under Article 101, the Commission (not national authorities) can fine GPAI providers up to 15 million euros or 3% of worldwide annual turnover for infringements of their Chapter V obligations or for failing to comply with the AI Office's requests.
Fines must be effective, proportionate and dissuasive. Article 99 lists factors that shape the amount: the nature and gravity of the breach, whether other authorities have already fined the same conduct, the size and market share of the operator, and whether the operator cooperated or self-reported.
Who enforces what
The AI Act has a two-level enforcement architecture: EU-level bodies for general-purpose AI and coordination, and national authorities for everything else.
The AI Office
Established within the European Commission, the AI Office is the centre of gravity for GPAI. It supervises and enforces the obligations on general-purpose AI model providers directly, can request documentation and model access, conduct evaluations, request mitigations, and ultimately restrict or recall models from the EU market. It also drives common implementation, including facilitating the GPAI Code of Practice.
National competent authorities
Each Member State designates at least one notifying authority and one market surveillance authority. Market surveillance authorities are the front line for high-risk and other non-GPAI enforcement in their territory: they investigate complaints, demand corrective action, and can require withdrawal or recall of non-compliant systems. Member States were required to designate and notify these authorities by 2 August 2025.
Coordination and expert bodies
- The European Artificial Intelligence Board brings together Member State representatives to coordinate consistent application across the Union.
- A scientific panel of independent experts advises on GPAI models, systemic risk and enforcement, and can alert the AI Office to models posing systemic risk.
- An advisory forum gives industry, SMEs, civil society and academia a channel to feed in.
- For breaches touching fundamental rights, designated national fundamental-rights authorities have powers to request documentation.
How enforcement actually plays out
In practice, an enforcement matter tends to follow a recognisable arc rather than jumping straight to a headline fine:
- Trigger. A complaint, a serious-incident report under Article 73, post-market monitoring data, a scientific-panel alert, or the authority's own market surveillance surfaces a concern.
- Information request. The authority requests technical documentation, logs and, for GPAI, potentially model access. Stonewalling or misleading responses is itself the third-tier offence.
- Assessment. The authority evaluates conformity, often against harmonised standards and the technical documentation the provider was required to keep.
- Corrective action. Where a system is non-compliant, the first move is usually an order to bring it into conformity, withdraw it, or recall it, within a set period.
- Escalation. Persistent or serious non-compliance, or prohibited-practice breaches, leads to fines and potential market restrictions. Cross-border cases are coordinated through the Board and, for GPAI, the AI Office.
Timing note: the substantive fining powers phase in with the obligations they back. Prohibited-practice rules have been enforceable since 2 February 2025 and GPAI obligations since 2 August 2025, while the bulk of high-risk obligations now apply from 2 December 2027 following the 2026 Digital Omnibus deferral. An enforcement gap on high-risk today does not mean the obligations have gone away.What this means for your compliance posture
- Turnover-based percentages mean the ceiling scales with your business; for a large group the 7% tier can dwarf the fixed euro figure.
- Documentation is your primary defence. The technical documentation, logs and QMS you maintain are exactly what an authority will ask for first, and gaps read as non-compliance.
- Cooperation and self-reporting are explicitly mitigating factors; a mature incident-reporting process is worth building before you need it.
- Enforcement is distributed. If you operate across Member States, expect coordination between national authorities and, for GPAI, direct Commission oversight.
The fine tiers grab attention, but the day-to-day reality of enforcement is documentary and procedural. Organisations that can produce clean records on demand are the ones least likely to see the top of the penalty range.