IAB Austria and act legal Austria have published a guide clarifying that advertising agencies are typically responsible for labeling AI-generated content under the EU AI Act. The document specifies that clients and publishers only assume labeling duties if they actively direct or modify AI-generated assets, and it emphasizes that visible labels are required rather than invisible watermarks.
This guidance establishes a clear liability framework for the European advertising ecosystem, placing the technical and legal burden of transparency on the production side. By defining agencies as the default deployers, the industry avoids a fragmented approach where brands might otherwise be held liable for tools they do not directly operate. However, the measured 31.5% drop in click-through rates for labeled ads creates a commercial tension between regulatory compliance and campaign performance. As programmatic platforms like Google automate their own labeling, agencies must now reconcile platform-level settings with these specific legal duties to avoid dual sanctions under both the EU AI Act and national competition laws. Watch for how many iterative feedback rounds between clients and agencies trigger a shift to shared 'co-deployer' status in future contracts.
A new guide from IAB Austria and act legal Austria clarifies that advertising agencies are primarily responsible for labeling AI-generated content under the EU AI Act. This framework protects brands from liability unless they actively direct AI production, though agencies must now balance these transparency requirements against declining ad performance metrics.
Advertising agencies are defined as the primary deployers responsible for implementing visible labels on AI-assisted advertising assets.
Brands only assume legal liability if they actively direct AI production through specific tool selection, prompting, or parameter setting.
Visible labels are mandatory for realistic AI-generated images, video, and audio. Abstract graphics and technical edits like color correction are exempt from these requirements.
Non-compliance risks fines of up to 15 million euros or 3% of global annual turnover.
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