- EU warns Microsoft of potential fines up to 1% of global annual turnover under the Digital Services Act.
- Microsoft allegedly failed to comply with a legally binding request for information regarding its generative AI tools.
- Commission sets May 27 deadline for Microsoft to provide requested data or face enforcement actions.
- Failure to comply could result in fines amounting to billions of dollars.
- Concerns raised about Bing’s generative AI features and their potential impact on civic discourse and electoral processes.
- Larger platforms like Bing face additional obligations under the DSA to mitigate systemic risks like disinformation.
Main AI News:
In a significant development, the European Union has cautioned Microsoft regarding potential fines amounting to 1% of its global annual turnover under the Digital Services Act (DSA). The warning comes after Microsoft allegedly neglected to comply with a legally binding request for information (RFI) concerning its generative AI tools.
The EU’s move follows its request back in March for information from Microsoft and other tech giants regarding the systemic risks associated with generative AI tools. However, the Commission stated that Microsoft failed to provide some of the requested documents, prompting this stern warning.
The Commission has set a deadline of May 27 for Microsoft to furnish the required data or face enforcement actions. According to the DSA, fines can escalate up to 6% of global annual revenue. Nevertheless, providing incorrect, incomplete, or misleading information in response to an RFI could result in a standalone fine of 1%. Given Microsoft’s revenue of $211.92 billion in the fiscal year ending June 30, 2023, this could potentially translate to a penalty of several billion dollars.
Under the DSA, the Commission oversees larger platforms’ systemic risk obligations, wielding a toolbox of potent enforcement measures. These measures could prove far more costly for Microsoft than any damage to its reputation resulting from non-compliance.
The Commission highlighted specific concerns about the risks posed by Bing’s generative AI features, notably the AI assistant “Copilot in Bing” and the image generation tool “Image Creator by Designer.” Of particular worry are any potential risks these tools may pose to civic discourse and electoral processes.
Microsoft has been given until May 27 to provide the missing information or face a fine of 1% of its annual revenue. Failure to comply by the deadline may also lead to “periodic penalties” of up to 5% of its average daily income or worldwide annual turnover.
This development comes after Bing was classified as a “very large online search engine” (VLOSE) under the DSA in April 2023, subjecting it to additional obligations aimed at mitigating systemic risks like disinformation.
The obligation imposed by the DSA on larger platforms to counter disinformation places generative AI technologies squarely in the spotlight. Despite their potential, these technologies have been criticized for their tendency to produce misleading information, including racially biased content and deepfakes.
With the EU elections looming, concerns about AI-fueled political disinformation are gaining traction in Brussels. The Commission emphasized the need for designated services like Bing to conduct thorough risk assessments and implement appropriate risk mitigation measures, particularly concerning generative AI.
In response to inquiries, a Microsoft spokesperson reiterated the company’s commitment to online safety and cooperation with regulators. Microsoft pledged to continue collaborating with industry peers to combat deceptive use of AI in the forthcoming elections, emphasizing its efforts to prepare tools for the 2024 elections and safeguard stakeholders involved in the electoral process.
Conclusion:
The EU’s warning to Microsoft underscores the growing regulatory scrutiny surrounding generative AI technologies. Failure to comply with disclosure requirements could result in significant financial penalties for tech giants like Microsoft. This signals a heightened focus on accountability and risk mitigation in the digital services market, with potential implications for innovation and competitive dynamics.
