EU Watchdog Mulls Probe On Microsoft’s OpenAI Partnership Over “Competition Issues”

OpenAI’s drama last year caught the attention of government regulators on both sides of the Atlantic. More specially, Microsoft’s $13 billion investment in the Sam Altman-led chatbot company is under intense scrutiny by European regulators. 

The European Commission said on Tuesday it’s mulling over whether the partnership could be reviewed under EU merger regulations:

“We are inviting businesses and experts to tell us about any competition issues that they may perceive in these industries, whilst also closely monitoring AI partnerships to ensure they do not unduly distort market dynamics,” Executive Vice-President and Commissioner for Competition Margrethe Vestager wrote in a statement. 

If Microsoft and OpenAI are found to be in breach of the bloc’s merger rules, Vestager could launch a full-scale investigation.  

The EU’s action follows a similar move by the United Kingdom’s Competition and Markets Authority (CMA) in early December. The CMA said it’s weighing “recent developments,” referring to the Altman-Microsoft drama. 

“The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity,” it said. 

In the US, the Federal Trade Commission recently said it would examine if Microsoft’s investment in OpenAI violates US antitrust laws. 

Early last year, FTC Chair Lina Khan penned an op-ed in The New York Times that explained: 

“The expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms.”

Back to the EU Commission, which gives Microsoft and OpenAI until March 11 to comment on how its AI impacts market competition.