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The European Union has issued a stern warning to Microsoft, threatening a fine of up to 1% of its global annual turnover if the company fails to provide requested information about the systemic risks posed by its generative AI tools, Bing's "Copilot in Bing" and "Image Creator by Designer".
This warning comes after Microsoft failed to comply with a legally binding request for information (RFI) under the Digital Services Act (DSA), the EU's online governance regime.
EU issued the threat in a press release on Friday, stating its concerns about the potential risks these tools pose to civic discourse and electoral processes, especially with the upcoming European Parliament elections in June.
“The request for information is based on the suspicion that Bing may have breached the DSA for risks linked to generative AI, such as so-called ‘hallucinations,’ the viral dissemination of deepfakes, as well as the automated manipulation of services that can mislead voters,” the Commission wrote in the press release.
“Under the DSA, designated services, including Bing, must carry out adequate risk assessment and adopt respective risk mitigation measures (Art 34 and 35 of the DSA). Generative AI is one of the risks identified by the Commission in its guidelines on the integrity of electoral processes, in particular for the upcoming elections to the European Parliament in June.”
The Commission has given Microsoft a deadline of May 27 to provide the missing information or face a fine of 1% of annual revenue, which could amount to billions of dollars. Failure to comply could also lead to periodic penalties of up to 5% of its average daily income or worldwide annual turnover.
Bing, designated as a "very large online search engine" (VLOSE) under the DSA, is subject to additional obligations regarding mitigating systemic risks like disinformation.
The DSA's focus on mitigating disinformation directly targets generative AI technologies, which have been integrated into mainstream platforms despite concerns about their potential to generate misleading or harmful content.
The Commission's request for information stems from suspicions that Bing may have breached the DSA due to risks associated with generative AI, such as "hallucinations" (the generation of fabricated information), the spread of deepfakes, and the manipulation of services to mislead voters.
Microsoft has not yet responded to the EU's warning, but the potential financial penalties and the upcoming European Parliament elections are likely to put significant pressure on the company to comply with the DSA's requirements.
