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Why the EU Warned Microsoft Over Bing AI Risk Information—and the Possible Penalties

The EU’s 2024 action demanded more information about AI risks in Bing. The potential turnover-based penalties were not a fine or a finding that Microsoft had violated the DSA.
From TheFinanceBase Team4 min to read

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The European Commission’s May 17, 2024 action was a legally binding demand for more information about generative-AI risks in Bing—not a fine or a finding that Microsoft had broken the law. The Commission said Bing’s earlier response had omitted requested internal documents and data, and gave Microsoft until May 27, 2024, to respond. The potential penalties were tied to the provider’s worldwide turnover, but no final fine is established by the cited Commission announcement.

What the Commission asked Microsoft to provide

The action followed a broader Commission request sent on March 14, 2024, to eight very large online platforms or search engines: Bing, Google Search, Facebook, Instagram, Snapchat, TikTok, YouTube and X. The request sought information about generative-AI risks and mitigation measures. The Commission’s wider inquiry covered areas including illegal content, fundamental rights, protection of minors, privacy, consumer protection and intellectual property; that wider scope should not be read as a finding that Bing had problems in every category. European Commission: March 14 information requests.

On May 17, the Commission escalated its request to Microsoft, saying it needed additional internal documents and data that were missing from Bing’s earlier response. It named Copilot in Bing and Image Creator by Designer. The request concerned Bing as a regulated service and those features—not every Microsoft AI product or Microsoft’s entire AI business. Microsoft’s deadline to reply was May 27, 2024. European Commission: May 17 request.

The distinction matters: the Commission said information had not been disclosed; that is not the same as saying Microsoft had no risk controls, or that the products had caused the harms under examination.

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Why Bing is subject to the Digital Services Act

Bing was designated a Very Large Online Search Engine (VLOSE) under the Digital Services Act (DSA). That status brings obligations to assess and mitigate systemic risks associated with the service. The Commission cited DSA Articles 34 and 35 for risk assessment and mitigation, Article 67(3) for requesting further information, Article 66 as the basis on which formal proceedings could potentially follow, and Article 74(2) for penalties relating to incorrect, incomplete or misleading information supplied in response to a request. European Commission: legal basis and Bing’s VLOSE status.

  • Risk assessment: Identify and analyze systemic risks linked to the service.
  • Risk mitigation: Take measures to address those risks.
  • Information demand: Provide evidence about the assessment and measures when the regulator requests it.
  • Enforcement: A separate possible step after the Commission reviews the information; it is not automatic when a request is made.

This was a DSA action, not an enforcement action under the EU AI Act. The Commission’s announcement framed the inquiry around Bing’s obligations as a very large search engine.

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Which AI-related risks were at issue?

The Commission identified concerns about AI-generated false or misleading information, the viral spread of deepfakes, and automated manipulation that could mislead voters. It said such risks could affect civic discourse and electoral processes, particularly with the June 2024 European Parliament elections approaching. These were risks the Commission wanted information about—not findings that Bing’s tools had already produced those harms. European Commission: cited risk concerns.

  • Hallucinations: Generated answers can present false or misleading claims as though they were reliable.
  • Deepfakes: Synthetic images or other media can be deceptive and spread widely, potentially reaching audiences before corrections do.
  • Automated manipulation: Coordinated or automated activity can distort what people see and influence how they interpret political information.

These concerns can become systemic when the design, reach or scale of a service exposes many people to the same risks. The Commission’s focus on elections reflected the timing of its request; it does not establish that any particular election was affected by Bing.

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How large were the possible penalties?

The Commission said failure to reply to the request could result in a fine of up to 1% of the provider’s total annual income or worldwide annual turnover. It also said periodic penalties for continued non-compliance could reach 5% of average daily income or worldwide annual turnover. Incorrect, incomplete or misleading information submitted in response to an information request could also attract a fine of up to 1%. These are statutory ceilings described by the Commission, not amounts it said Microsoft had to pay. European Commission: potential penalties.

Contemporary coverage used Microsoft’s reported fiscal-year revenue of approximately $211.92 billion for the year ended June 30, 2023 to illustrate the scale: 1% is about $2.12 billion. That is a rough arithmetic example based on that revenue figure, not a legal calculation of a likely penalty or a fine imposed by the Commission. The actual outcome, if there were a later enforcement decision, would depend on the conduct and applicable procedure. TechCrunch: revenue figure and contemporary estimate.

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Periodic penalties serve a different purpose from a one-time fine: they can pressure a provider to comply with an ongoing request or obligation. The Commission’s warning described a possible ceiling, not an amount that accrues automatically.

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What Microsoft said

Microsoft said it was committed to safe online experiences and was cooperating with the Commission. It said it remained committed to answering the questions and sharing more about its digital-safety and DSA-compliance approach, and pointed to measures intended to protect voters, candidates, campaigns and election authorities during the 2024 elections. These are Microsoft’s statements, not independent findings about the effectiveness of those measures. TechCrunch: Microsoft’s response.

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What the warning did—and did not—establish

The Commission described its demand as an investigatory act. It said it would assess Microsoft’s response and could consider opening formal proceedings under Article 66 of the DSA. The request did not prejudge whether formal proceedings would begin or whether a fine would follow. The cited announcement confirms the 2024 information demand and possible penalties; it does not establish a final fine or completed enforcement outcome.

For companies operating public-facing AI features, the practical lesson is procedural as well as technical: risk assessments, mitigation decisions and supporting records need to be documented well enough to answer a regulator’s questions. An information request can test whether a provider can substantiate what it assessed and did, even before a regulator has reached a conclusion about an underlying violation.

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