UK Regulator Eyes Microsoft-OpenAI Partnership for Antitrust Probe

The UK is considering an investigation into Microsoft's partnership with OpenAI to decide whether it resulted in an antitrust "acquisition of control"

by Sededin Dedovic
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UK Regulator Eyes Microsoft-OpenAI Partnership for Antitrust Probe
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The UK's Competition and Markets Authority (CMA) is considering an investigation into Microsoft's collaboration with OpenAI to assess whether it may have resulted in an antitrust "gain of control". The regulator is particularly scrutinizing recent developments, possibly alluding to the upheaval surrounding the ouster of CEO Sam Altman, where Microsoft played a significant role.

In an official statement, the CMA announced that it was launching an initial enforcement order (ITC) to determine whether the Microsoft/OpenAI partnership, together with recent events, gave rise to a relevant merger situation and, if so, the potential impact on competition.

The CMA will examine whether the partnership has resulted in an acquisition of control, meaning that one party has acquired significant influence, de facto control or more than 50% of the voting power over another entity.

Highlighting the extensive and complex nature of the partnership, which includes significant investments by Microsoft and cooperation in the development of technology and cloud services, the regulator pointed out that both companies have significant activities in financial and related markets, which directly affects investors.

In addition, Microsoft's recent involvement in OpenAI's management-related development has raised eyebrows from regulators.

Independence of both entities

The CMA is seeking views on whether the partnership creates a relevant merger situation and its impact on UK competition.

Microsoft maintains that its relationship with OpenAI maintains the independence of both entities, stressing that the recent change involves a non-voting observer on the OpenAI board, rather than an outright acquisition, unlike Google's purchase of DeepMind.

If the investigation continues, it would be the second investigation involving Microsoft in the past year, following its acquisition of Activision Blizzard. A UK investigation into the merger led to Microsoft agreeing to sell Activision Blizzard's game streaming rights to Ubisoft to address CMA concerns.

The technology giant expresses its commitment to cooperation with the CMA and provides all the necessary information for the inquiry. One thing is certain, the tech giants face scrutiny over potential antitrust implications and the recent management changes that have unfolded

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