Microsoft and OpenAI's relationship faces a potential antitrust probe by the European Union's regulatory body.
As first reported by Reuters, the European Commission might launch an antitrust investigation of Microsoft's $13 billion investment in OpenAI, with the publication's sources allegedly saying regulators are building the case for such a probe.
Reuters' sources noted that the European Commission had decided not to investigate the relationship under EU merger rules but is still assembling a potential antitrust investigation.
This investigation could aim to determine if the partnership restricts or distorts competition within the EU internal market. However, according to a Reuters source, the European Commission is reportedly leaning towards a second angle—investigating whether Microsoft's market power distorts the market through specific practices.
The sources mentioned that no decision has been made yet, as the EU competition enforcer is seeking evidence. They may ultimately choose not to initiate an investigation.
While Microsoft had declined to comment to Reuters, a spokesperson for the European Commission told the outlet it is considering whether Microsoft's investment in OpenAI might be reviewable under the EU Merger Regulation:
In this respect, it is however important to underline that in order to look into potential competition concerns, the Commission first needs to conclude that there has been a change of control on a lasting basis."
If the European Commission were to proceed with its probe into Microsoft and OpenAI, it would complete a troika of Western regulatory bodies investigating the relationship, with the UK’s Competition and Markets Authority (CMA) and the US's Federal Trade Commission (FTC) also scrutinising the partnership.
Why Are There Multiple Investigations Into Microsoft and OpenAI's Partnership?
Microsoft has invested $13 billion in OpenAI over the past five years and recently secured a nonvoting position on its board following November’s dramatic OpenAI saga in which its CEO, Sam Altman, was ousted by OpenAI's board before being reinstated just four days later following pressure from both employees and investors.
