The European Union could investigate the partnership between Microsoft and OpenAI. The regulatory body wants to know if the alliance deserves to be examined under merger rules. The European Commission would follow in the footsteps of the FTC and CMA, who announced their intentions a few weeks ago.
In accordance with a press release, the European Commission is studying the agreements that have been held between large technology companies and generative AI companies. The regulator wants to know the impact these associations will have in market dynamics, mainly Microsoft and OpenAI.
The Commission will check whether Microsoft’s multi-million dollar investment in OpenAI could be reviewable under the European Union’s Merger Regulation. The decision coincides with the findings of the United Kingdom Competition and Markets Authority (CMA). British dependence called on all involved to comment on whether the partnership could lead to a merger that threatens competition.
In the case of the EU, the Commission is not only focusing on the generative AI competition, but also the metaverse. According to the regulator, AI systems and virtual worlds are disruptive technologies with great potential. The Commission not only seeks to ensure that competition rules are respected, but that security is guaranteed and people’s fundamental rights are respected.
“Both technologies are expected to grow exponentially in the coming years and are likely to have a major impact on the way companies compete,” said Margrethe Vestager, head of competition policy. “Effective enforcement of EU competition rules is essential to maintaining competition in the EU single market.”
Microsoft’s investment in OpenAI could threaten competition
The European Commission wants to know if the $10 billion that Microsoft spent on OpenAI could lead to a typical merger scenario. Regulators fear that such a partnership causes a decrease in competition and puts innovation at risk in the generative AI market.
The publication of this notice does not imply that an investigation is underway. The Commission is inviting interested parties to answer a series of questions on artificial intelligence and virtual worlds (metaverse) with a focus on competition.
“The objective of these calls for contributions is to collect specific information and opinions in relation to competition aspects from regulatory experts, academia, industry and consumer organisations,” the EU mentions. “The Commission may organize a workshop with relevant stakeholders to discuss these issues based on the responses to the consultation.”
By contrast, The German authority (Bundeskartellamt) analyzed the partnership between Microsoft and OpenAI and concluded that it was not subject to that country’s merger regulations. It is important to mention that the regulator reached this conclusion before the soap opera between Sam Altman and the board of directors. Likewise, the federal agency declared that the alliance would be subject to investigation if Microsoft increased its participation in the future.