Source: Billo
California will require large generative AI providers to introduce detection and provenance features, while the European Union will require providers, brands and agencies to mark or label AI-generated content that resembles a real or plausibly real person, object or event. New York separately requires disclosure when an advertisement uses a synthetic performer. Many US ad campaigns fall outside all three laws, so revealing AI use is still a trust decision brands make on their own.
July 31, 2026. Two major AI transparency laws will take effect on August 2, 2026, one in California and one across the European Union.
Although both rules address AI-generated content, they regulate different actors and impose different obligations. California’s initial requirements apply directly to providers of publicly accessible generative AI systems with more than 1 million monthly visitors or users.
In the EU, providers must make AI-generated or manipulated content machine-detectable, while professional deployers, including brands and agencies, must visibly disclose deepfakes. These can depict existing or plausibly existing people, objects, places, entities or events where the content could falsely appear authentic or truthful.
A third law, already in effect in New York since June, covers a performer built entirely from AI who resembles no one real.
Neither rule creates a general requirement for every U.S. brand to tell viewers that an advertisement was made with AI.
That leaves three separate definitions of the same problem, and Donatas Smailys, co-founder and CEO of Billo, doesn’t expect any of them to become the real standard yet.
“Nobody is going to wait for three different laws to tell them what to do,” said Donatas Smailys. “Honestly, I’d like to see broader rules here. Most brands are left guessing whether their ads need a label at all, and that’s not good for anyone. Until lawmakers catch up, platforms like TikTok and Google are already labeling AI content on their own. They’re not waiting for brands to disclose first. Keeping track of three separate rules costs more than just labeling everything. Most brands will end up disclosing by default.”
How the Three Laws Differ
Two of the laws will take effect on August 2, 2026, and a third is already live. In each case, disclosure of AI use is defined differently:
- California binds providers of generative AI systems with 1 million-plus monthly users, not brands or agencies. Providers must offer a free public detection tool, an optional visible disclosure and a mandatory hidden watermark in AI images, video and audio. Violations can result in a $5,000 civil penalty per violation, with each day of continuing non-compliance treated as a separate violation, under the California AI Transparency Act as amended by AB 853.
- The European Union applies Article 50 on the same day. The rule reaches brands directly, but only when AI-generated content copies the likeness of a real person, object, entity or event and it applies to any advertiser whose ads reach EU consumers, regardless of where the company is based. Penalties can reach up to €15 million or 3% of worldwide annual turnover.
- New York, where the law has applied since June 9, covers the opposite case: invented performers who resemble no one. It applies wherever an advertiser’s ads reach New York consumers, regardless of headquarters, and only where the advertiser has actual knowledge. The first violation carries a $1,000 penalty; each one after that is $5,000.
What Consumers Want and What Platforms Are Already Doing
Most consumers want AI use labeled, but most laws don’t require it. A Fractl and Search Engine Land survey of 1,008 US consumers and 150 marketers, conducted in the second quarter of 2026, found 91% want AI-generated video labeled, along with 90% for images, 87% for audio and 84% for written content. Only 20% of organizations say they always disclose AI use but a third of organizations say they never do.
“Six months ago, almost no brand asked us whether a creator used AI in their video,” said Smailys. “Now it comes up in nearly every brief. Brands want to know exactly what was shot on camera and what wasn’t, whether or not a law requires them to ask.”
That shift is starting to show up on platforms too, even without a legal mandate behind it. Google’s My Ad Center now includes a “How this ad was made” panel across Search, YouTube and Discover, with automatic disclosure for ads built using Google’s own generative AI tools.
TikTok was the first video platform to adopt C2PA, an industry content-authenticity standard, in May 2024, and now holds a seat on the standard’s Steering Committee. Using that standard alongside creator-applied labels and invisible watermarking, the platform has labeled more than 3 billion videos as AI-generated. It removed more than 86 million fake accounts in the first quarter of 2026 alone.
What This Means for Brands
For most brands, it comes down to three checks: what tool made the content, whether it resembles a real person, and whether the performer on screen was invented. Billo’s experts recommend four steps to check where a campaign stands before it runs:
- Check whether your ads reach New York. The disclosure requirement follows the audience, not the company’s headquarters. A campaign run entirely outside the state still falls under the law if a New York consumer sees it.
- Ask your agency whether any person on screen is AI-generated. New York’s law applies where the advertiser has actual knowledge.
- If you run campaigns in the EU, check whether the AI content resembles a real person. That resemblance is what triggers Article 50’s disclosure duty for brands.
- Platforms may label AI-generated content independently, but brands should not assume every AI-assisted ad will be detected automatically. TikTok and Google are already disclosing AI use on their own. Brands can choose whether that disclosure comes from them first, or from the platform’s detection system.
“Brands that check where they stand under all three laws now will know exactly what to do,” Smailys added. “The ones that skip that step aren’t avoiding the question. They’re just leaving the answer to someone else, a regulator, a customer, or a platform that labels the ad for them. Either a brand decides when to disclose, or something else decides it first.”
About Billo
Billo is the leading UGC creator marketing platform founded in 2019 that connects brands with creators to produce high-performing social video ads. It is based in San Francisco, CA, and is led by the co-founder and CEO, Donatas Smailys. The platform combines the power of UGC content with a streamlined production process, helping brands increase brand awareness, drive traffic, and boost conversions with authentic creator videos on TikTok, Meta, YouTube, and other platforms.