Article 50 of the EU AI Act is arguably the provision that will affect the most businesses. While high-risk obligations target specific sectors and use cases, transparency obligations apply to nearly every organization that uses AI in customer-facing contexts — including chatbots, content generation tools, and AI-powered customer service systems.
These transparency rules apply from August 2, 2026. That is just over 5 months away. If your SME uses any form of generative AI, conversational AI, or AI-driven content creation, this article explains exactly what you need to do.
Who Must Comply
Article 50 creates obligations for both providers (organizations that develop or place AI systems on the market) and deployers (organizations that use AI systems in their operations). Most SMEs fall into the deployer category — you are using AI tools built by others — but if you have built your own AI-powered chatbot or content generation system, you may also be a provider.
The critical point: even if you did not build the AI system, you still have transparency obligations when you deploy it in customer-facing contexts.
Article 50(1): AI Interaction Disclosure
The rule: If your AI system is designed to interact directly with natural persons, the people interacting with it must be informed that they are interacting with an AI system — unless this is obvious from the circumstances and context of use.
What this covers:
- AI chatbots on your website or app
- AI-powered customer service agents
- Virtual assistants that handle inquiries
- Any automated system that communicates with people in natural language
The "obvious" exception is narrow. A clearly labeled chatbot widget titled "AI Assistant" with a robot icon likely qualifies. A sophisticated AI agent that responds in natural language via email or messaging — without any indication that it is not human — does not.
Practical guidance: Do not rely on the exception. A simple disclosure like "You are chatting with an AI assistant" at the start of every interaction costs nothing and eliminates ambiguity.
Article 50(2): Synthetic Content Marking
The rule: Providers of AI systems that generate synthetic audio, image, video, or text must ensure that the outputs are marked in a machine-readable format as artificially generated or manipulated.
This obligation primarily falls on providers — the companies building generative AI tools like image generators, text-to-speech systems, and video generation platforms. However, the practical impact flows downstream to every business using these tools.
What this means for SMEs:
- If you use AI to generate marketing images, the provider of that tool must ensure machine-readable marking is embedded in the output
- If you build your own generative AI system (even fine-tuning a model for content creation), you become a provider with direct marking obligations
- Machine-readable marking means metadata, watermarks, or other technical identifiers — not just a text disclaimer
Key nuance: The marking must be interoperable and as reliable as technically feasible. The European AI Office is developing harmonized standards and technical specifications for these markings. Until those are finalized, the expectation is that providers implement state-of-the-art detection and marking mechanisms.
Article 50(3): Emotion Recognition and Biometric Categorization
The rule: Deployers of emotion recognition systems or biometric categorization systems must inform the natural persons exposed to them about the operation of the system. They must also process personal data in accordance with GDPR and other applicable data protection law.
What this covers:
- AI systems that analyze facial expressions, voice tone, or body language to detect emotions
- Systems that categorize people based on biometric data (such as gender, ethnicity, or age estimation from facial features)
SME relevance: If you use any AI tool that analyzes customer sentiment through video calls, voice analysis in call centers, or facial expression analysis in retail environments, you must proactively inform every affected person. This is not a "bury it in the privacy policy" obligation — the disclosure must be given to persons exposed to the system before it is used on them.
Article 50(4): Deepfake Disclosure
The rule: Deployers of AI systems that generate or manipulate image, audio, or video content constituting a deepfake must disclose that the content has been artificially generated or manipulated.
What counts as a deepfake under the Act: Any AI-generated or manipulated image, audio, or video content that appreciably resembles existing persons, objects, places, or events and would falsely appear to a person to be authentic.
The exceptions:
- Artistic, creative, satirical, or fictional works — AI-generated content clearly presented as part of creative expression is treated differently, though it must still not undermine protections in the Charter of Fundamental Rights
- Content with human editorial oversight — When AI-generated text is published under human editorial responsibility and undergoes a process of human review, the disclosure obligation shifts to the publisher rather than requiring inline labeling
Practical impact for SMEs:
- AI-generated product images that resemble real products → disclosure required
- AI-generated spokesperson videos → disclosure required
- AI-assisted blog posts reviewed and edited by a human editor → the editorial oversight exception may apply, but the publisher still bears responsibility for transparency
- AI-generated social media content → disclosure required unless clearly artistic or satirical
Article 50(5): How and When to Disclose
The rule: The information required under Article 50 must be provided to natural persons clearly and distinguishably at the latest at the time of the first interaction or exposure. The information must conform to applicable accessibility requirements.
What "clearly and distinguishably" means:
- The disclosure cannot be buried in terms of service or privacy policies
- It must be visible, prominent, and easy to understand
- It must be provided at or before the moment of interaction — not after
- It must meet accessibility standards (screen-reader compatible, sufficient contrast, clear language)
Best practice: Place disclosure statements where users encounter them naturally — at the top of a chat window, as a banner on AI-generated content, or as a clear label on synthetic media.
Practical Implications for SMEs
Here is a scenario-by-scenario breakdown of what Article 50 means for common SME use cases:
AI Chatbots on Your Website
You must clearly disclose that the user is interacting with an AI system. Add a visible notice at the start of every conversation. "You are chatting with an AI assistant. A human agent is available upon request" is a solid template.
AI-Generated Marketing Content
If you use tools like DALL-E, Midjourney, or Stable Diffusion to generate marketing images, the provider of those tools must embed machine-readable markings. On your end, you should disclose AI involvement — particularly for images that could be mistaken for photographs of real scenes, products, or people.
AI-Generated Text Content
If you use ChatGPT, Claude, or similar tools to draft marketing copy, blog posts, or product descriptions, and a human reviews and edits the content before publication, the editorial oversight exception under Article 50(4) may apply. However, this exception requires genuine editorial review — not just clicking "publish."
Customer Service Bots
Any AI-powered customer service system that interacts with customers in natural language requires disclosure. This includes AI systems integrated into phone lines (IVR with natural language understanding), email auto-responders that use AI to generate responses, and chat-based support bots.
AI-Generated Product Images
If you use AI to generate or enhance product images — particularly images that could be mistaken for real photographs — disclosure is required. This is increasingly relevant for e-commerce SMEs using AI for product visualization.
Penalties for Non-Compliance
Transparency obligation violations fall under Tier 2 of the EU AI Act's penalty framework:
- Up to EUR 15 million, or
- Up to 3% of total worldwide annual turnover (whichever is higher)
For SMEs specifically, the regulation allows for proportionate penalties — meaning smaller businesses may face adjusted fines. However, "proportionate" does not mean "negligible." The regulation explicitly states that fines should be effective, proportionate, and dissuasive.
The penalty applies per violation. An AI chatbot running without disclosure on a high-traffic website could constitute a continuous violation affecting thousands of users.
Timeline
Article 50 transparency obligations become enforceable on August 2, 2026. This is the same date that high-risk AI system obligations under Articles 6-49 come into force.
However, certain transparency-related obligations for general-purpose AI (GPAI) models under Article 53 have applied since August 2, 2025. If you are a provider of a GPAI model, some of your transparency obligations are already in effect.
Action Checklist
Use this checklist to assess your readiness for Article 50 compliance:
1. Inventory your AI touchpoints
Identify every AI system that interacts with natural persons — chatbots, virtual assistants, automated email responders, AI-powered phone systems.
2. Audit your AI-generated content
Catalog all AI-generated images, videos, audio, and text used in your marketing, sales, and communications.
3. Implement interaction disclosures
Add clear, visible "You are interacting with AI" notices to every AI-powered interaction point. Do this now — it costs nothing and eliminates risk.
4. Verify provider compliance for synthetic content marking
Contact your AI tool providers and confirm that their outputs include machine-readable AI-generated content markings. Request documentation.
5. Review your editorial processes
If you rely on the editorial oversight exception for AI-generated text, document your review process. Who reviews? What changes are made? Keep records.
6. Check for emotion recognition or biometric categorization
If any of your tools analyze facial expressions, voice sentiment, or categorize people by biometric data, implement disclosure mechanisms immediately.
7. Update your privacy notices
While Article 50 disclosures cannot live solely in a privacy policy, your privacy policy should still reference your AI transparency practices for GDPR alignment.
8. Train your team
Ensure that marketing, customer service, and product teams understand which AI uses require disclosure and how to implement it.
Article 50 transparency is not the most complex part of the EU AI Act, but it is the most broadly applicable. Nearly every SME using modern AI tools will have at least one obligation under this article. The good news: most of these obligations are straightforward to implement. The key is to start now, before August 2, 2026, so you are not scrambling when enforcement begins.