The European Union has warned Microsoft that it could be fined up to 1% of its global annual turnover under the bloc’s online governance regime, the Digital Services Act (DSA), after the company failed to respond to a legally binding request for information (RFI) that focused on its generative AI tools. Back in March, the EU had asked Microsoft and a number of other tech giants for information about systemic risks posed by generative AI tools. On Friday, the Commission said Microsoft failed to provide some of the documents it asked for. The Commission has given the company until May 27 to supply the requested data or risk enforcement. Fines under the DSA can scale up to 6% of global annual revenue, but incorrect, incomplete or misleading information provided in response to a formal RFI can result in a standalone fine of 1%. That could sum to a penalty of up to a couple of billion dollars in Microsoft’s case — the company reported revenue of $211.92 billion in the fiscal year ended June 30, 2023. Larger platforms’ systemic risk obligations under the DSA are overseen by the Commission itself, and this warning sits atop a toolbox of powerful enforcement options that could be far costlier for Microsoft than any reputational ding it might get for failing to produce data on request. The Commission said it is missing information related to risks stemming from search engine Bing’s generative AI features — notably, the regulator highlighted AI assistant “Copilot in Bing” and image generation tool “Image Creator by Designer.”
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