EU Law on Artificial Intelligence: Early Preparation Can Give Companies a Competitive Advantage

The European Union’s law on artificial intelligence is set to be fully implemented by August 2026, but some provisions enter into force even before that.

The legislation establishes a regulatory framework that is the first of its kind for artificial intelligence systems, using a risk-based approach and classifying artificial intelligence applications based on their potential impact on safety, human rights, and societal well-being.

“Some systems are completely banned, while systems considered ‘high-risk’ are subject to stricter requirements and assessments before deployment,” as explained by DPO Center, a data protection consultancy.

As with the General Data Protection Regulation (GDPR), the law’s scope beyond regional borders means it applies to any organization marketing, deploying, or using artificial intelligence systems within the European Union, regardless of where the system is developed. Companies will primarily be categorized as either “providers” or “publishers,” with additional categories for “distributors,” “importers,” “product manufacturers,” and “authorized representatives.”

For institutions developing or deploying artificial intelligence systems, especially those classified as high-risk, compliance preparation is expected to be complex. However, experts suggest viewing this as an opportunity rather than a burden.

The DPO Center points out that “by adopting compliance as an incentive for more transparent use of artificial intelligence, companies can turn regulatory requirements into a competitive advantage.”

Key readiness strategies include comprehensive staff training, establishing strong corporate governance, and implementing robust cybersecurity measures. Legislative requirements often intersect with existing data protection laws, especially regarding transparency and accountability.

Organizations must also adhere to ethical principles of artificial intelligence and maintain clear documentation of their systems’ functions, limitations, and intended uses. The European Union is currently developing best practice codes and specific models to assist with compliance obligations.

For companies uncertain about their obligations, experts recommend seeking professional guidance early on. Tools like the EU AI Act Compliance Checker can help organizations verify compliance with regulatory requirements.

Instead of viewing compliance as merely a regulatory burden, forward-thinking organizations should see the EU’s artificial intelligence law as an opportunity to demonstrate commitment to responsible AI development and build greater trust with their customers.

See also: AI Governance Gap: 95% of Companies Have Not Implemented Frameworks