The EU’s new AI Act requires clear labeling of AI-generated content, but some retailers argue this could affect a massive share of advertising. The term ‘deepfake’ is often associated with non-consensual pornography, making the EU’s use of it questionable. Retailers like Zalando and H&M are already using AI-generated content, such as product images and model clones. As the law takes effect on August 2, the EU must clarify its definition of deepfakes to avoid stifling innovation and transparency in advertising. Why it matters: The EU’s handling of deepfakes will set a precedent for how AI-generated content is regulated globally, with significant implications for the retail industry and consumer trust.