Could the EU AI Act deter 'housefishing' in European real estate?

The European Union's AI Act, which came into force in early August, may soon deter a practice known as "housefishing" in the European real estate market. Housefishing involves using artificial intelligence to enhance or alter images of properties to make them appear more appealing than they are in reality. This technique can deceive potential buyers, particularly those relocating to a new city and unable to see the property in person.

Under Article 50 of the EU AI Act, AI-generated or modified content must be labeled, including images of apartments that have been "furnished using AI." The AI transparency icon must be displayed to inform customers or bidders that the image might be AI-generated or manipulated. Providers of AI content, such as companies like Open AI or Anthropic, must label images in a machine-readable format, while deployers, or individuals using AI systems to create or enhance images, must include a visible label on the image.

The EU AI Act aims to protect consumers by ensuring transparency in AI-generated or modified content. However, enforcement remains unclear. Users must plug the machine-readable code into another website to verify if AI has been involved at the provider level, which may not be very clear. Additionally, determining whether an image has undergone partial manipulation or full generation can be challenging, as the AI Act does not distinguish between the two.

The punishment for non-compliance with the AI Act is steep, with fines of up to €15 million or 3% of worldwide turnover. National authorities are responsible for enforcing the act, but given the rapid turnover of real estate listings, individual cases may be difficult to monitor. The Professional Institute of Real Estate Agents recognizes the importance of AI transparency but acknowledges that the current enforcement mechanism and consumer awareness are still far from satisfactory.