Source: Lexology

Lexology provides a business-centric breakdown of the European Union’s AI Act, outlining how it will impact companies operating within the bloc. The article highlights the Act’s risk-based classification system for AI applications—ranging from minimal to high risk—and the corresponding obligations imposed on providers, developers, and users.

High-risk AI systems, such as those used in recruitment or biometric identification, must meet strict requirements including transparency, accountability, human oversight, and data quality standards. Companies will need to implement risk management systems, maintain documentation, and ensure post-market monitoring.

The piece warns that failure to comply could result in severe financial penalties and reputational damage. It encourages businesses to begin compliance efforts early, integrating legal and technical teams to align operations with the upcoming regulatory framework.