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Microsoft-OpenAI Antitrust Action In The EU

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The EU’s possible antitrust probe into Microsoft’s $13 billion investment in OpenAI has attracted much scrutiny. The European Commission is presently evaluating whether this collaboration has the potential to limit or distort competition inside the internal market of the European Union. At first, there was no determination to initiate an antitrust inquiry according to EU merger regulations, but the situation is still subject to change as the Commission continues to collect data.

Microsoft maintains a non-voting role on OpenAI’s board and has explicitly stated that it does not possess any ownership interest in OpenAI. This distinction is crucial in assessing the nature of their association according to EU legislation. The European Commission is specifically examining whether this investment would be subject to the EU Merger Regulation. If it is found that Microsoft has a lasting change of control over OpenAI, a more formal investigation would be necessary.

However, certain sources indicate that the EU regulators may choose not to initiate a formal probe, despite these concerns. This stance is grounded on the belief that Microsoft’s funding does not amount to a takeover and that Microsoft does not exercise control over OpenAI’s strategic direction.

This has alleviated some of the pressure on Microsoft, avoiding the more rigorous examination that a formal investigation may involve.
Moreover, the matter is further complicated by the interest expressed by other regulatory entities. The UK’s Competition and Markets Authority and the U.S. Federal Trade Commission are contemplating conducting their own inquiries into the Microsoft-OpenAI agreement, which may impact or align with the steps taken by the EU.

To summarize, the European Commission is closely examining Microsoft’s stake in OpenAI, although the final result of this possible antitrust action is still uncertain. The Commission’s decision will depend on a thorough examination of the partnership’s effect on competition and the extent of Microsoft’s control over OpenAI.