European Regulators Closely Scrutinize Microsoft’s $13B Investment in OpenAI
Government regulators in Europe have turned their attention to Microsoft’s significant investment of $13 billion in OpenAI, a chatbot company led by Sam Altman. Specifically, the European Commission is considering whether this partnership warrants a review under EU merger regulations. In a statement, Margrethe Vestager, the Executive Vice-President and Commissioner for Competition, invited businesses and experts to report any competition concerns they may have regarding these industries. Furthermore, the Commission is closely monitoring AI partnerships to ensure they do not unduly distort market dynamics.
If Microsoft and OpenAI are found to have violated the bloc’s merger rules, Vestager has the authority to initiate a comprehensive investigation. This move by the European Union follows a similar action taken by the United Kingdom’s Competition and Markets Authority (CMA) in December. The CMA indicated that it is evaluating recent developments, alluding to the controversy surrounding the Microsoft-OpenAI deal. Their assessment will focus on whether the partnership has resulted in the acquisition of control, wherein one party holds significant influence, de facto control, or more than 50% of the voting rights over another entity.
In the United States, the Federal Trade Commission recently announced its intention to examine if Microsoft’s investment in OpenAI violates US antitrust laws. Last year, FTC Chair Lina Khan penned an op-ed in The New York Times, expressing concerns about the growing adoption of AI and its potential to solidify the market dominance of large technology companies.
The European Commission has given Microsoft and OpenAI until March 11 to provide their comments regarding how their AI technology impacts market competition. This request demonstrates the Commission’s commitment to considering all perspectives and maintaining a fair and balanced approach to the scrutiny of this partnership.
It remains to be seen whether the investigation conducted by European and US regulators will result in any actions against Microsoft and OpenAI. However, the attention from both sides of the Atlantic underscores the significance of this investment and the potential implications it may have on market competition. As the deadline approaches for Microsoft and OpenAI to present their comments, stakeholders and industry experts eagerly await the outcome of these regulatory examinations.
