EU AI Act fines for SMEs: the real numbers
Forget the €35M headlines. Here's what AI Act non-compliance can actually cost a small business under the SME cap.
The fine tiers
Prohibited AI practices (Article 5): up to €35M or 7% of worldwide turnover. Most operator obligations, including Article 4 literacy and Article 50 transparency: up to €15M or 3%. Supplying wrong information to authorities: up to €7.5M or 1%.
The SME cap reverses the math
For large companies the ceiling is the HIGHER of the fixed amount or percentage. For SMEs and startups, Article 99(6) caps fines at the LOWER of the two.
Concretely: an SME with €2M worldwide turnover faces a maximum of roughly €60,000 for an Article 50 breach (3% of €2M), not €15M. At €500K turnover the ceiling is €15,000. Authorities must also weigh proportionality: nature, gravity, duration, and company size.
Why compliance still matters at these numbers
Three reasons: fines stack per infringement; an enforcement action is public and toxic to B2B trust; and increasingly, large customers demand AI Act compliance evidence in procurement, and the commercial cost of failing a vendor audit dwarfs most fines.
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Run the scope checkCompliance information, not legal advice. Basis: Regulation (EU) 2024/1689 as amended by Regulation (EU) 2026/1744, directly applicable in all EU member states; national implementing laws vary by country. Last reviewed 23 August 2026.