EU AI Act
10 Common Misconceptions About the EU AI Act Fine Structure
By EUActReady Team · 2026-06-03
Think the EU AI Act's €35 million fines apply to every business using AI? Think again. We debunk the 10 most widespread myths about how penalties actually work
Introduction Since the EU AI Act (Regulation 2024/1689) entered into force, its penalty provisions have generated more fear than understanding. Figures like "€35 million" and "7% of global turnover" circulate in headlines, but the full picture is considerably more nuanced. Misunderstanding the fine structure leads to two equally dangerous outcomes: panic-driven over-compliance spending, or complacency from thinking fines will never land on a small business. Here are the 10 most common misconceptions — and the reality behind each one. Misconception 1: "The €35 million fine is the maximum everyone faces" Reality: The €35 million figure is only the floor for large companies violating Article 5 (prohibited AI practices). For organisations with significant global turnover, the 7% calculation applies if it produces a higher number — and for major tech firms, that figure can run into billions of euros. Conversely, for SMEs and startups, Article 99(6) reverses the logic: they face the lower of the fixed amount or the turnover percentage. A startup with €2 million annual turnover that violates a prohibited AI rule faces a maximum fine of €140,000 (7% of €2M), not €35 million. The headline f