AI deals between Microsoft and OpenAI, Google and Samsung, under EU scanner
Microsoft and OpenAI’s partnership could face an EU antitrust probe as regulators scrutinize Microsoft’s exclusivity clauses. Google’s artificial intelligence deal with Samsung could also be the subject of investigation.
EU competition authorities will seek the views of additional third parties, EU competition chief Margrethe Vestager said on Friday.
The moves underscore the unease that regulators around the world are feeling about Big Tech abusing its dominant position in new technology, a reflection of the companies’ market power in other sectors.
Vestager sent questionnaires in March to Microsoft, Google, Meta’s Facebook and ByteDance’s TikTok, as well as other major tech companies, about their AI partnerships.
“We have reviewed the responses and are now sending a follow-up request for information about the Microsoft-OpenAI agreement to understand whether certain exclusivity clauses could negatively impact competitors,” she told a conference.
Reuters was first to report that EU regulators were preparing a case that could lead to an investigation into the two companies’ collaboration.
“We stand ready to respond to any additional questions the European Commission may have,” a Microsoft spokesperson said.
According to Vestager, the collaboration between Microsoft and OpenAI does not fall under EU merger rules due to the lack of control.
While OpenAI’s parent company is a non-profit organization, Microsoft has invested $13 billion (approximately Rs 1,08,425 crore) in a for-profit subsidiary, amounting to a 49 percent stake.
Vestager also worried about Big Tech preventing smaller AI developers from reaching users and businesses.
“We are also sending requests for information to better understand the effects of Google and Samsung’s agreement to pre-install the small Gemini Nano model on certain Samsung devices,” they said.
Google inked a multi-year agreement with the South Korean company in January to integrate its generative artificial intelligence technology into Samsung’s Galaxy S24 series of smartphones.
Vestager also said she was looking at “acqui-hires,” where one company acquires another primarily for talent. An example of this is Microsoft’s acquisition of startup Inflection in March for $650 million (about Rs. 5,422 crore). This allowed the company to use Inflection’s models and hire most of its staff.
“We will ensure that these practices do not slip through our merger control rules if they in fact amount to a concentration,” she said.
© Thomson Reuters 2024
