EU antitrust regulators will seek additional third-party views on the partnership between Microsoft (MSFT) and OpenAI as well as Google's (GOOGL) artificial intelligence deal with Samsung for Samsung devices, EU competition chief Margrethe Vestager said on Friday. Vestager had in March sent questionnaires to Microsoft, Google, Meta's (META) Facebook, and ByteDance's TikTok as well as other big tech companies related to their AI partnerships. "We have reviewed the replies, and are now sending a follow-up request for information on the agreement between Microsoft and OpenAI. To understand whether certain exclusivity clauses could have a negative effect on competitors," she told a conference.
Microsoft’s $13 billion investment in OpenAI is set to come under added scrutiny from the European Union’s antitrust watchdogs, who are poised to quiz rivals about the AI firm’s exclusive use of Microsoft’s cloud technology. Vestager announced that the EU has ruled out an investigation under the EU’s merger rules into the deal. Instead, regulators are asking Microsoft’s rivals about the US company’s exclusivity clauses with OpenAI, and whether they might negatively affect competition. The EU will also circulate questions to the market on Google’s (GOOG) arrangement with Samsung Electronics to pre-install its small model “Gemini nano” on certain devices.
Market Overview:- EU antitrust regulators investigate AI partnerships.
- Focus on Microsoft's deal with OpenAI and Google's deal with Samsung.
- Questions about exclusivity clauses and competition effects.
- Microsoft invested $13 billion in OpenAI.
- EU seeks to understand the impact of exclusivity clauses.
- Google and Samsung's AI partnership also under scrutiny.
- Potential for formal investigations and behavioral changes.
- Microsoft and OpenAI ready to respond to EU queries.
- Ongoing monitoring of big tech AI partnerships by global regulators.
Vestager added that regulators are examining attempts by Big Tech to buy firms by way of mass hires. The EU’s preliminary step comes after the US Federal Trade Commission launched investigations into Microsoft’s hiring of Inflection staff. "We will make sure these practices don’t slip through our merger control rules if they basically lead to a concentration," Vestager said. The EU’s classic competition law is generally used to home in on potentially anti-competitive agreements between firms and also cases where powerful players abuse their dominance. If wrongdoing is found, fines can rise to 10% of a company’s revenue.
Microsoft is no stranger to EU antitrust scrutiny and has previously faced a long battle with regulators over abuses linked to the market dominance of Windows. This week, the EU accused the company of abusing its market power by bundling the Teams video-conferencing app with its other business software. The outcome of these investigations could significantly impact the dynamics of AI development and deployment among major tech firms, setting a precedent for future regulatory actions in the AI space.
