› The EU AI Act’s penalty rules have applied since 2 August 2025.
› Headlines often reduce them to “up to €35 million or 7% of global turnover,” but that shorthand leaves out an important detail: the authority applies whichever amount is higher.
› I’ve worked through the thresholds to show when the percentage-based figure overtakes the fixed amount - and how the rules differ for small and medium-sized enterprises (SMEs).The highest tier covers prohibited practices under Article 5, including social scoring, real-time remote biometric identification in publicly accessible spaces, and emotion recognition in workplaces and schools.
› Article 99(3) sets the maximum at €35 million or 7% of total worldwide annual turnover, whichever is higher.