Microsoft Hit With Huge Fine By EU

If the Redmond company, Microsoft does not provide a response to the DSA of the EU over Bing AI by May 27, it could incur a fine amounting to as much as 1% of its annual revenue, according to regulatory guidelines

The threat arises from a request submitted by the Digital Services Act of the European Union, which pertains to the Bing search engine and its generative artificial intelligence services.

May 17 saw the publication of an X.com post that demanded Microsoft “provide information under the Digital Services Act on generative A.I. risks on Bing”; this post informed the public of the development.

The Commission explained in a blog entry titled “Daily News” that the initial request was submitted on May 14 “concerning particular hazards associated with Bing’s generative A.I. functionalities, specifically “Copilot in Bing” and “Image Creator by Designer.”

Further, the blog post stated that Microsoft “presently possesses until May 27 to furnish the Commission with the information that has been requested.”

Suppose the E.U.’s request must still be fulfilled by the specified deadline. In that case, the Commission “may impose fines of up to 1% of the provider’s total annual income” and “periodic penalties of up to 5% of the provider’s average daily income.”

Although a 1% revenue penalty may not appear to be a significant monetary setback, it could surpass two billion dollars for Microsoft. Microsoft’s self-reported revenue for 2023 amounted to $211 billion.

Should the present market trajectory persist, the company’s revenue for 2024 could surpass that amount. Based on these figures, a minimum potential sanction for the Redmond company would be approximately $2.1 billion.

Notably, these penalties have not yet been assessed, and Microsoft has not been convicted of violating any E.U. laws as of this writing—at least not about this notice.

Conversely, this seems to be a courtesy notice directed at the public, informing the company that it has been duly notified of a request for additional information that carries repercussions should it be disregarded.