EU Slaps Microsoft with Multi-Billion Dollar Fine Over Bing AI

Microsoft is potentially facing a significant fine from the European Union, which could amount to as much as 1% of its annual revenue. This fine hinges on the company’s timely response to an information request by May 27. The issue stems from a request made under the E.U.’s Digital Services Act, which centers on Microsoft’s Bing search engine and its related generative artificial intelligence services.

A public disclosure made on May 17 indicated that the European Union had asked Microsoft to “provide information under the Digital Services Act on generative AI risks on Bing.” These concerns were detailed in a post, mentioning risks related to generative AI on Bing, including “hallucinations,” deepfakes, and the automated manipulation of services that could mislead voters.

According to an announcement from the European Commission, the initial request for information was issued on May 14. The request specifically cited risks associated with Bing’s generative AI features, particularly components known as “Copilot in Bing” and “Image Creator by Designer.” The commission indicated that Microsoft has a deadline of May 27 to supply the requested details.

The statement further warned that the European Commission could impose fines up to 1% of Microsoft’s total annual income if it does not comply by the deadline. Microsoft could face periodic penalties of up to 5% of its average daily income for continued non-compliance. For a company like Microsoft, whose reported 2023 revenue was $211 billion, a 1% fine could exceed two billion dollars.

Though a 1% penalty might seem minor in some contexts, for a giant such as Microsoft, it translates to a significant sum—at least $2.1 billion based on last year’s revenue figures. Should the company continue to grow at its current rate, even more substantial fines could be on the horizon.

It’s important to note that no fines have been levied thus far, and Microsoft has not been found guilty of any E.U. law violations relevant to this particular issue. The notice essentially serves as a formal reminder to the company to meet the European Union’s information request deadlines to avoid potential penalties.

This situation underscores a broader trend of regulatory bodies increasing their scrutiny on tech giants and their compliance with digital laws and regulations. By demanding transparency and accountability, the European Union aims to mitigate the risks associated with emerging technologies, including generative AI.

Attempts to get an official comment from Microsoft have been unsuccessful thus far. The clock is ticking for the company to address the E.U.’s concerns and provide the necessary information to avoid substantial financial penalties.