Europe’s biggest retailers are pushing back against upcoming artificial intelligence regulations that could require companies to label a wide range of AI-generated advertising content, arguing that the rules risk treating harmless marketing tools the same way as deceptive deepfake technology.
EuroCommerce, which represents major retailers including Amazon, H&M, Inditex, and IKEA, has asked the European Union to exempt certain AI-generated advertisements from new transparency obligations under the bloc’s artificial intelligence law.
The group sent a letter to EU technology chief Henna Virkkunen, urging regulators to distinguish between AI content designed to deceive consumers and AI-assisted commercial material created for ordinary advertising purposes.
The request comes ahead of the implementation of the European Union AI Act, which enters into force on August 2. The legislation requires companies to disclose when AI has been used to create or modify images, video, or audio content that qualifies as a “deep fake.”
EuroCommerce argues that the definition should not capture routine advertising applications, such as generating product backgrounds, enhancing images, or creating virtual environments for marketing campaigns.
In the letter, EuroCommerce Director General Christel Delberghe said AI-generated advertisements that are not intended to mislead users should not fall under deepfake rules.
The letter said the regulation should not cover AI-generated ads “not intended to mislead users, for example, generating an image of a living room to showcase a sofa, or enhancing product visuals for presentation purposes.”
The dispute highlights a major policy challenge facing governments worldwide: regulating AI-generated content without limiting legitimate uses of the technology.
Retailers have rapidly adopted generative AI as they seek to reduce marketing costs, speed up content creation, and personalize digital shopping experiences. AI tools can now generate product images, write advertising copy, create digital models, and adapt campaigns for different audiences within minutes.
German online fashion platform Zalando has said AI has reduced content production costs by 90%, showing why companies are eager to integrate the technology into their operations. Fashion retailers have also been experimenting with AI-generated models. H&M and Zara owner Inditex have explored digital replicas and AI-generated fashion content as they attempt to make campaigns cheaper and more flexible.
For the industry, the concern is that broad labeling requirements could force companies to place AI disclosures on a large volume of ordinary commercial material, potentially making consumers less attentive to warnings that are actually important.
EuroCommerce warned that forcing disclosure on “a very large share of AI-assisted content” could reduce the effectiveness of transparency measures by making labels too common.
The argument comes as Europe attempts to position itself as a global leader in AI governance. The EU AI Act is among the world’s most comprehensive attempts to regulate artificial intelligence, introducing different obligations depending on the level of risk posed by a system.
The rules are aimed at addressing concerns that AI can be used to create realistic fake videos, impersonate individuals, manipulate public opinion, or mislead consumers. Deepfakes have become a major concern as generative AI tools become more powerful and accessible.
However, businesses argue that not every AI-generated image or video represents the same level of risk.
A retailer using AI to place a product in a digitally generated living room, adjust lighting, or create a virtual catalogue image is fundamentally different, they argue, from a malicious actor creating a fake video of a public figure promoting a false product or making a misleading statement.
The debate also exposes the broader economic impact of AI adoption. Many companies view generative AI as a way to improve productivity and reduce operating costs, particularly in industries where producing large volumes of digital content is expensive. Advertising and e-commerce have become early beneficiaries because AI can automate tasks that previously required photographers, designers, copywriters, and production teams.
But regulators face pressure from consumer groups and policymakers who worry that AI-generated content could blur the line between reality and fabrication.
The outcome of the debate could have implications beyond Europe. Global retailers, advertising companies, and technology firms are closely watching how the EU, which sets the pace in AI regulation, defines AI-generated content because its regulations often influence standards adopted in other markets.
A strict interpretation could increase compliance costs for companies operating across multiple countries. A more flexible approach could accelerate AI adoption but raise concerns about whether consumers will always know when they are interacting with synthetic content.
