Yahya 
In a historic bipartisan move, both chambers of the U.S. Congress have voted by significant margins to nullify the controversial ruling by the Securities and Exchange Commission (SEC) on Staff Accounting Bulletin (SAB) 121. The fulcrum of the debate is, however, the directive intended to alter a few accounting standards. Facing such broad bipartisan support, President Biden vowed his veto of the repeal, which makes many doubt whether Congress’s actions will be defied by the Executive Branch. Under these circumstances, the prospective overflow between the legislative and executive bodies is rather unsettled.
Microsoft Faces EU Deadline and Potential Fine
While Microsoft is in the middle of the European Union’s probe in the meantime, The tech giant risks losing up to 1% of its annual revenue if it fails to respond to any information requests by the date given, May 27th. The submitted petition under the European Union’s Digital Service Act to Microsoft concerns the Bing search engine and its powerful AI services.
Digital Services Act and AI Risks
On May 17, a post on X.com revealed that, in accordance with the Digital Services Act in the U.S., Microsoft would need to disclose information on AI risks on Bing. The European Commission is worried about possible threats related to the generative AI Bing, as the Commission considers “hallucinations” and deepfakes to be misleading and has the ability to manipulate automatically services, which could probably mislead voters.
A new blog post on the Brussels site of the European Commission describing Daily News indicates that the request was originally sent out on May 14th. It specifically singles out both “Copilot in Bing” and “Image Creator by Designer,” which are generative AI features, as risks of concern.
Potential Financial Impact on Microsoft
In the event that Microsoft does not fulfill the obligations regarding the implementation of the decision process by the European Commission, it will be subject to penalties that can be as high as 1% of the global turnover annually. Despite the fact that Microsoft disclosed its revenue of $211 billion for the year 2023, the company faces a fine in the range of more than $2.1 billion. On the other hand, the Commission is able to impose a progressive penalty of not more than 5% of the company’s average daily income.
Although these fines are still to be imposed and Microsoft has not broken any rules yet, this warning to them, however, serves as a clear announcement that could lead to serious repercussions if there was non-compliance. The status points to an upcoming era of increased global regulatory scrutiny of tech companies, particularly with regard to fast-developing technologies such as generative AI.
With the U.S.’s deadline for preparedness just around the corner, Microsoft is in the spotlight as the entire world holds its breath to watch how the company will react to the organization’s demands. In addition to this, the U.S. anticipates knowing if the President intends to uphold his veto threat against the Congress’s decision to impeach the SEC leaders and members. This represents the woven mesh of powers among governmental bodies against which tech companies struggle with complex procedures and philodoxies.