Microsoft risks billions in fines as EU investigates its generative AI disclosures

Microsoft may face a harsh scolding from the European Union (EU) after failing to provide information on risks posed by generative AI tools.

The tech company has until May 27 to present the commission with appropriate documents that outline potential harm arising from Bing’s generative AI features specifically, like its AI assistant Copilot and image generator Image Creator by Designer. As TechCrunch reported, the EU worries that such tools could pose a threat to "civic discourse and electoral processes."

The fines would be processed under requirements for Very Large Online Search Engines (VLOSEs) within the EU's Digital Services Act (DSA), and levy up to one percent of Microsoft's global annual turnover against the company.

"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. "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."

Should Microsoft still fail to provide the requested information, the commission can impose penalties of up to 5 percent of its average daily income or worldwide annual turnover.

In March, the European Union approved what many called a landmark AI regulation, known simply as the AI Act, which establishes oversight and enforcement procedures for AI technology deemed "high risk." The law additionally bans certain risky AI applications, including "emotion recognition, predictive policing, and AI that manipulates human behavior or exploits people’s vulnerabilities."

Meanwhile, the bloc is also utilizing the DSA to probe social media companies, as leaders open several investigations into child safety and emotional wellbeing across apps like TikTok, Facebook, and Instagram.