Microsoft faces a potential fine of up to 1% of its annual revenue from the European Union if it fails to respond to a request for information by May 27.
This demand relates to concerns under the EU’s Digital Services Act about the Bing search engine and its generative artificial intelligence (AI) services.
On May 17, the European Commission announced on X that it seeks details from Microsoft regarding “generative AI risks on Bing.”
The Commission noted, “Bing may pose risks linked to generative AI, such as so-called ‘hallucinations’, deepfakes, as well as the automated manipulation of services that can mislead voters.”
A blog entry on the European Commission’s official website, dated May 14, further elaborated on the request.
It mentioned specific risks associated with Bing’s AI features, particularly “Copilot in Bing” and “Image Creator by Designer.”
The post stated that Microsoft “now has until 27 May to provide the requested information to the Commission.”
The Commission also warned of significant financial penalties if Microsoft fails to comply.
The fines could reach up to 1% of Microsoft’s total annual income, along with periodic penalties of up to 5% of the provider’s average daily income.
Given Microsoft’s reported revenue of $211 billion in 2023, a 1% fine could exceed $2 billion.
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While such a fine may not severely impact Microsoft’s financial standing, the sum is still substantial.
With Microsoft’s revenue potentially increasing in 2024, the penalty could be around $2.1 billion if enforced.
However, it’s important to note that Microsoft has not been found guilty of violating any EU laws in this instance.
This action serves more as a formal notice requiring Microsoft to provide additional information, with penalties outlined for non-compliance.
Cointelegraph reached out to Microsoft for a comment but did not receive a response.
This situation highlights the growing scrutiny on tech companies’ use of generative AI and the potential regulatory challenges they face in complying with new digital laws.
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