BRUSSELS | European retailers are pushing back against transparency rules for AI-generated advertising, arguing that product images and marketing visuals created with artificial intelligence should not automatically be treated like deceptive deepfakes.
The dispute is an early test of how the European Union's AI Act will apply outside obvious high-risk uses. Retailers want room to use AI tools for speed, cost and creative variation. Regulators want consumers to know when content has been generated or materially altered by AI, especially when synthetic people, product claims or misleading images are involved.
What retailers want
Reuters reported that EuroCommerce, which represents major retailers, asked the European Commission to exempt AI-generated ads from certain transparency rules when the content is not intended to deceive. The industry argument is that requiring labels on ordinary AI-assisted advertising could produce too many disclosures and reduce their usefulness.
Retailers increasingly use AI to generate product images, model variations, background scenes and campaign materials. The business case is clear: lower production costs, faster localization and the ability to test creative concepts without traditional photo shoots.
What the EU is trying to prevent
The transparency rules are meant to protect consumers from synthetic content that could mislead them. That includes deepfake-style material, altered images, synthetic people and outputs that make it hard for viewers to know whether they are seeing a real event, real person or accurate product representation.
Advertising sits in a gray zone because it has always involved staging, editing and persuasion. The new question is whether AI makes that staging materially different or simply more efficient.
The consumer trust problem
Retailers may be right that too many labels can create noise. If every image that used an AI tool carries a warning, consumers may stop paying attention. But regulators may also be right that unlabeled synthetic advertising can blur the line between creative presentation and deception.
The key distinction should be substance. Was the AI used to change lighting or background? Did it create a model who does not exist? Did it alter how a product looks, fits, performs or is used? Did the image imply a claim that is not true? Those are different risks.
Business costs and compliance
For companies, compliance is not only about adding a label. It requires tracking how content was produced, documenting review processes, training marketing teams and deciding when a disclosure is required. Large retailers may build systems quickly. Smaller businesses may struggle.
That is why industry groups want clearer guidance before enforcement begins. Ambiguity can cause either under-compliance or over-labeling. Neither outcome helps consumers.
What to watch next
The European Commission's response will influence how brands, platforms and agencies build AI workflows. If exemptions are broad, AI-generated advertising could become routine with limited disclosure. If rules are strict, retailers may need persistent labeling and audit trails for large parts of their marketing output.
The larger issue is not whether AI belongs in advertising. It already does. The issue is whether consumers can still tell when an image is creative, when it is synthetic and when it is misleading.
Additional Reporting By: Reuters; European Commission AI Act Materials; EuroCommerce public materials; CGN News technology-policy review.