EU AI Act: what do fashion companies need to know in 2026?

KEY TAKEAWAYS Summary by the editors

1. The EU AI Act, Regulation (EU) 2024/1689, entered into force on 1 August 2024; prohibitions and AI literacy have applied since 2 February 2025 and transparency rules under Article 50 since August 2026.
2. The Digital Omnibus on AI, Regulation (EU) 2026/1744, entered into force on 27 July 2026 and postponed high-risk obligations to 2 December 2027 for Annex III uses and 2 August 2028 for AI in regulated products.
3. Most fashion AI, such as demand forecasting, recommendations and product content generation, falls into the minimal-risk category, but AI used in recruitment, worker management or consumer credit can be high-risk.
4. Using AI to infer the emotions of employees in the workplace is prohibited, and deployers must disclose deep fakes, which matters for AI-generated campaign imagery.
5. Fines can reach €35 million or 7% of worldwide annual turnover for prohibited practices, and €15 million or 3% for most other violations.

Fashion companies need to know that the EU AI Act already applies in part: banned practices and AI literacy since February 2025, and transparency rules for chatbots and AI-generated content since August 2026. The Digital Omnibus, in force since 27 July 2026, moved the main high-risk obligations to December 2027. For most fashion uses of AI the obligations are light, but HR, workforce and credit applications deserve close attention.

What is the EU AI Act?

The AI Act, Regulation (EU) 2024/1689, is the EU's horizontal law on artificial intelligence. It entered into force on 1 August 2024 and follows a risk-based approach. The European Commission describes four levels: unacceptable risk (prohibited practices), high risk, transparency risk and minimal or no risk, with most AI systems in the EU falling into the last category.

The law distinguishes between providers, who develop an AI system or have it developed and place it on the market under their own name, and deployers, who use an AI system under their authority. A fashion brand that licenses a forecasting tool is usually a deployer. A brand that builds its own AI tool and offers it to customers or partners under its own name can become a provider, with heavier duties.

What did the Digital Omnibus change?

The Commission proposed the Digital Omnibus on AI on 19 November 2025. It was adopted as Regulation (EU) 2026/1744 of 8 July 2026 and entered into force on 27 July 2026. The main changes relevant to fashion companies are:

• High-risk deadlines postponed: obligations for high-risk systems listed in Annex III now apply from 2 December 2027, and for AI in products covered by Annex I from 2 August 2028.
• AI literacy reworded: Article 4 now requires providers and deployers to take measures to support the development of AI literacy of their staff and others operating AI systems on their behalf.
• Grace period for marking: providers of generative systems placed on the market before 2 August 2026 have four months to adapt machine-readable marking of AI-generated content.
• New prohibitions: AI that generates non-consensual intimate imagery of identifiable people or child sexual abuse material is banned from 2 December 2026.
• Bias detection: a new Article 4a allows processing of special categories of personal data where strictly necessary for bias detection and correction, under safeguards.
• Simplification: simplified documentation and quality management options for SMEs and small mid-caps, and lighter registration rules.

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Which AI Act dates apply when?

Which fashion AI uses are affected?

Minimal risk. Demand forecasting, assortment planning, pricing, product recommendations, search and product data enrichment are generally not specifically regulated by the AI Act, although AI literacy, data protection and consumer law still apply.

Transparency. Under Article 50, providers must design AI systems that interact directly with people, such as shopping assistants, so that users are informed they are dealing with AI unless this is obvious. Providers of generative systems must mark outputs in a machine-readable way. Deployers that publish deep fakes must disclose that the content is artificially generated or manipulated. The Act defines a deep fake as AI-generated or manipulated image, audio or video content that resembles existing persons, objects, places, entities or events and would falsely appear to be authentic. Whether a synthetic model in a campaign meets that definition depends on the case, so marketing teams should agree a disclosure policy with legal advisers. There are lighter rules for evidently artistic or creative work.

High risk. Annex III lists AI used for recruitment and selection, for decisions on promotion or termination, for allocating tasks based on individual behaviour or traits, and for monitoring and evaluating workers. Retailers with large store and warehouse workforces use exactly such tools. AI that evaluates the creditworthiness of natural persons is also high-risk, which can matter for retailers offering their own consumer credit. Deployers of high-risk systems must, among other things, follow instructions for use, assign competent human oversight, keep logs for at least six months and inform workers' representatives before workplace use.

Prohibited. AI systems that infer the emotions of people in the workplace are banned under Article 5, with narrow exceptions, as is biometric categorisation that deduces sensitive characteristics. Ideas such as analysing sales staff's facial expressions should therefore be ruled out.

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What should fashion companies do now?

1. Build an inventory of all AI systems in use, including AI features inside existing software.
2. Classify each by risk level and by your role as provider or deployer.
3. Document AI literacy measures: training appropriate to roles and the systems people use.
4. Set rules for disclosing chatbots and AI-generated imagery in marketing and e-commerce.
5. Review HR, workforce management and credit tools with suppliers ahead of 2 December 2027.
6. Check that no tool infers employees' emotions or sensitive characteristics.

The Omnibus has given companies more time for high-risk obligations, not an exemption. Fashion companies that use the period to map their AI, clarify responsibilities with vendors and train staff will be better placed when the remaining obligations apply.

Frequently asked questions

When does the EU AI Act apply?

It entered into force on 1 August 2024 and applies in stages. Prohibitions and AI literacy have applied since 2 February 2025, transparency rules since August 2026, and high-risk obligations from 2 December 2027 or 2 August 2028 following the Digital Omnibus.

Was the EU AI Act delayed?

Partly. The Digital Omnibus, Regulation (EU) 2026/1744, postponed high-risk obligations from August 2026 to 2 December 2027 for Annex III systems and 2 August 2028 for AI in regulated products. Prohibitions, AI literacy and most transparency rules were not postponed.

Do fashion brands have to label AI-generated images?

Deployers must disclose deep fakes, meaning AI-generated or manipulated content that resembles real persons, objects, places or events and would falsely appear authentic. Whether a given campaign image qualifies depends on the case, so brands should set a clear disclosure policy.

Is AI used in fashion recruitment high-risk?

Yes. AI used to recruit or select candidates, evaluate them, or make decisions on promotion, termination or task allocation is listed as high-risk in Annex III. These obligations apply from 2 December 2027.

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