Companies in Spain Risk €35 Million Penalties for Not Labeling AI-Generated Content

Companies in Spain Risk €35 Million Penalties for Not Labeling AI-Generated Content

 

Spain Moves to Regulate AI-Generated Content with Strict Penalties

Spain’s government has introduced a new bill aimed at tackling the spread of AI-generated misinformation, particularly “deepfakes,” by enforcing strict labeling requirements. Companies that fail to comply could face substantial fines under the proposed law.

The legislation aligns with the European Union’s AI Act, which establishes stringent transparency rules for high-risk AI applications. Speaking to reporters, Digital Transformation Minister Óscar López emphasized the importance of AI regulation.

“Artificial intelligence is a powerful tool that can enhance our lives,” López stated. “However, it also has the potential to spread misinformation and undermine democracy.”

Spain is among the first EU countries to implement the bloc’s AI regulations, which contrast with the United States’ largely self-regulated approach.

The proposed law highlights the risks posed by deepfake technology—AI-generated videos, images, and audio that can be deceptively realistic. To combat this threat, the bill mandates clear labeling of AI-generated content. Companies failing to comply would face penalties of up to €35 million (£30 million) or 7% of their global annual revenue.

Since the introduction of ChatGPT in 2022, governments worldwide have focused on AI safety. Spain’s bill also bans AI-driven subliminal messaging, including hidden sounds or images designed to manipulate vulnerable individuals. Authorities cited concerns over chatbots promoting gambling or AI-powered toys influencing children to engage in unsafe activities.

Additionally, the legislation prohibits organizations from using AI to categorize individuals based on biometric data or behavioral patterns for assessing eligibility for benefits or criminal risk. However, real-time biometric surveillance in public spaces for national security purposes would still be permitted.

Oversight of the law will fall under Spain’s newly established AI regulatory body, AESIA. In specific sectors, such as privacy, crime, elections, credit ratings, insurance, and capital markets, enforcement will be managed by existing regulatory agencies.

The bill now awaits approval in Spain’s lower house before becoming law.

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