A cap set at a fixed euro sum or a share of global annual: How are administrative fines generally structured
EU AI Act fines are capped at the higher of a fixed euro amount or a percentage of global annual turnover, tiered by violation severity.
The question
A company has breached a high-risk obligation (not a prohibited practice) under the EU AI Act. How are administrative fines generally structured for such a breach?
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- A cap set at a fixed euro sum or a share of global annual turnover, whichever is higher. ✓Correct: the Act caps fines at the higher of a fixed monetary amount or a percentage of the undertaking's total worldwide annual turnover, scaled by the type of violation.
- A single flat fine that is identical for every violation regardless of its actual severity.Plausible but wrong: fines are tiered by the seriousness of the breach, not a single flat amount for all violations.
- Criminal imprisonment imposed directly on executives by the European Commission.Plausible but wrong: the Act's enforcement relies on administrative fines, not criminal imprisonment imposed by the Commission.
- A penalty calculated solely as a percentage of the individual project's revenue.Plausible but wrong: the turnover basis is the undertaking's global annual turnover, not the revenue of a single project.
The trap
Believing the fines are a single flat amount or based on one project's revenue rather than the higher of a fixed sum or global turnover. How to remember it
EU AI Act fines are capped at the higher of a fixed euro amount or a percentage of global annual turnover, tiered by violation severity.
How many of these would you get right?
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