EU is Investigating Microsoft’s Partnership with OpenAI
- Paul Thurrott
- Jan 09, 2024
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The European Union is investigating Microsoft’s unique partnership with OpenAI to determine if it violates antitrust laws.
“The European Commission has launched today calls for contributions on competition in generative artificial intelligence (‘AI’) and sent requests for information to several large digital players,” the announcement notes. “In addition, the European Commission is looking into some of the agreements that have been concluded between large digital market players and generative AI developers and providers … Finally, the European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation.”
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The EU investigation follows similar probes by the U.S. Federal Trade Commission (FTC) and UK Competition and Markets Authority (CMA). The issue is whether Microsoft, one of the largest and most powerful companies in the world, is skirting antitrust regulation by partnering with OpenAI to create a de facto acquisition that regulators around the world would block were it a formal, legal acquisition. In other words, Microsoft is getting all the benefits of an acquisition with none of the scrutiny.
“Generative AI is rapidly developing,” EU vice president Margrethe Vestager said. “It is fundamental that this new market stay competitive, and that nothing stands in the way of businesses growing and providing the best and most innovative products to consumers. We are inviting businesses and experts to tell us about any competition issues that they may perceive in this industry, whilst also closely monitoring AI partnerships to ensure they do not unduly distort market dynamics.”
The European Commission would like interested parties to provide it with feedback by March 11, 2024.
Note: This action also involves “virtual worlds”—augmented reality (AR) and virtual reality (VR), presumably—but I’ve kept the focus on AI, Microsoft, and OpenAI here because it specifically calls out these firms and their partnership.