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Brussels is preparing an antitrust investigation into Microsoft's $13 billion investment in OpenAI after the EU decided to not conduct a merger review of essentially the most powerful alliance in the bogus intelligence industry.
The European Commission, the EU's executive arm, began examining a possible merger control scheme in January but announced on Friday that it could not pursue it on account of an absence of evidence that Microsoft controls OpenAI.
However, the Commission said it was now examining the opportunity of a conventional antitrust investigation to search out out whether the link between the world's Most worthy listed company and the best-funded AI start-up was damaging competition within the fast-growing market.
The Commission has also examined the agreement between Google and Samsung, which provides for the installation of a modified version of the AI ​​system “Gemini” within the South Korean manufacturer's smartphones, it announced on Friday.
Margrethe Vestager, the EU competition commander, said in a speech on Friday: “The key query was whether Microsoft had gained everlasting control of OpenAI. After an intensive review, we concluded that this was not the case. So we’re closing this chapter, however the story shouldn’t be over yet.”
She said the EU had sent a brand new set of questions to search out out whether “certain exclusivity clauses” within the agreement between Microsoft and OpenAI “could have a negative impact on competitors.” The move is seen as a crucial step toward a proper antitrust investigation.
The bloc had already sent inquiries to Microsoft and other technology firms in March to find out whether market concentration within the AI ​​field could potentially prevent recent firms from entering the market, Vestager said.
Microsoft said: “We welcome the European Commission's thorough review and its conclusion that Microsoft's investment and partnership with OpenAI doesn’t give it control over the corporate.”
Brussels began investigating Microsoft's relationship with the ChatGPT maker after OpenAI's board abruptly fired its CEO Sam Altman in November 2023, only to rehire him a number of days later. He briefly joined Microsoft as head of a brand new AI research unit, underscoring the close relationship between the 2 firms.
Regulators within the US and UK are also scrutinising the alliance. Microsoft is OpenAI's largest backer, although its investment of as much as $13 billion, increased in January 2023, shouldn’t be a purchase order of conventional equity on account of the start-up's unusual corporate structure. Microsoft owns a minority stake in OpenAI's business subsidiary, which is owned by a non-profit organisation.
Antitrust investigations typically take years, unlike merger reviews, that are much shorter. They concentrate on behavior that might harm competitors. Companies found to be breaking the law, for instance by bundling products or denying competitors access to key technologies, risk heavy fines and a legal obligation to vary their behavior.
Vestager said the EU is looking into practices that may lead to at least one company controlling a bigger share of the AI ​​market. She pointed to a practice called “acqui-hires,” during which one company buys one other primarily to get its talent. For example, Microsoft recently struck a deal during which it is going to poach many of the top team from AI startup Inflection, during which it had previously invested. However, Inflection stays an independent company, complicating any traditional merger investigation.
The EU competition commissioner said regulators were also investigating the means by which large technology firms may prevent smaller AI models from reaching users.
“That's why we’re also sending requests for information to raised understand the impact of the agreement between Google and Samsung to pre-install the small model 'Gemini nano' on certain Samsung devices,” Vestager said.
Jonathan Kanter, the highest U.S. antitrust official, told the Financial Times earlier this month he was also investigating “monopoly bottlenecks and the competitive landscape” within the AI ​​space. The U.K. Competition and Markets Authority said in December it had “decided to research the Microsoft-OpenAI deal” when asking customers and competitors for comment.
