EU Slaps Microsoft with Warning that it Could Face Billions of Fines Over Missing Generative AI Risk Report

By Jace Dela Cruz

May 18, 2024 02:25 AM EDT

This photograph taken on January 19, 2023 shows the logo of the American corporation Microsoft displayed during the World Economic Forum (WEF) annual meeting in Davos.
(Photo : FABRICE COFFRINI/AFP via Getty Images)

The European Union (EU) has warned Microsoft, indicating the tech giant could face fines of up to 1% of its global annual turnover.

This action falls under the Digital Services Act (DSA), which is a result of Microsoft's failure to provide a requested report on its generative AI tools.

EU Seeks for More Information From Microsoft

The EU Commission's request for information, initially sent on March 14, sought details about the risks associated with Bing's generative AI features, specifically "Copilot in Bing" and "Image Creator by Designer." 

Microsoft has until May 27 to comply with the request, which demands internal documents and data not previously disclosed.

The Commission's suspicion revolves around potential breaches of the DSA related to risks from generative AI, including issues like AI-generated 'hallucinations,' the spread of deepfakes, and automated manipulations that could mislead voters. 

The DSA mandates that services like Bing conduct thorough risk assessments and implement measures to mitigate these risks, particularly concerning electoral integrity.

READ NEXT:  Xbox Game Studios Faces Further Job Cuts As Microsoft's Restructuring Continues

Potential Fines

Failure to meet the deadline could result in substantial fines for Microsoft, potentially reaching 1% of its global annual turnover. Additional penalties, up to 5% of the company's average daily turnover, could be imposed for incomplete or misleading information. 

Designated as a very large online search engine, Bing must adhere to the DSA's comprehensive provisions. The EU considers the suspected DSA violations threats to civic discourse and electoral processes. 

This investigatory request does not preclude further actions but sets the stage for potential formal proceedings, depending on the Commission's assessment of Microsoft's forthcoming responses. 

READ MORE: Microsoft Xbox Announces Closure of Four Gaming Studios Over Disappointing Sales  

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics