HomeWinBuzzer NewsEU Investigates Microsoft-OpenAI Partnership for Antitrust Concerns

EU Investigates Microsoft-OpenAI Partnership for Antitrust Concerns

The European Commission is scrutinizing whether the collaboration could establish market dominance.

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The European Commission (EC) has commenced an antitrust probe into Microsoft‘s partnership with OpenAI, focusing on potential violations of European competition laws, reports the Financial Times.

Margrethe Vestager, the Executive Vice President of the European Commission, outlined a possible investigation in a speech this week. She revealed that officials have posed a series of questions to and regarding “specific exclusivity clauses” within their partnership agreement.

The Financial Times writes that there is concern these clauses could disadvantage competitors in the artificial intelligence market.

Microsoft´s Strong Ties with OpenAI

Microsoft made a decisive move in 2019 by investing a billion dollars into OpenAI, signaling a robust commitment to bolstering its AI capabilities. This partnership not only allowed Microsoft to license OpenAI's technology but also paved the way for AI services to be integrated across Microsoft's technology stack via Microsoft Azure and Microsoft Copilot.

Microsoft has invested further in OpenAI, up to $10 billion, and is now on the company's board. Microsoft will reportedly receive 75% of OpenAI's profit until recouping the investment.

Focus of the Investigation

Key aspects of the inquiry include the specifics of the partnership's terms, with particular attention to any practices that might limit competition. The European Commission is scrutinizing whether the collaboration could establish market dominance detrimental to other players.

Given Microsoft's stature—especially its widely used Windows OS and Office suite—the integration of OpenAI's AI advancements into products like the Azure cloud platform is under scrutiny. The Commission has dispatched a questionnaire to both companies addressing exclusivity provisions in their agreement.

Broader Implications for the Tech Sector

Should the inquiry determine that the collaboration infringes on antitrust statutes, both companies may face significant fines and be required to amend their operational strategies. This scenario indicates the EU's commitment to maintaining a competitive market within the tech industry.

The probe also highlights the heightened regulatory sanctions that substantial tech entities might confront as they diversify across different segments. In addition, the Commission is considering the impact of “acqui-hires” on the AI sector, with particular scrutiny on Microsoft's recent recruitment from Inflection AI Inc., a competitor to OpenAI.

Both Microsoft and OpenAI have pledged to cooperate fully with the investigation. Microsoft asserts that the alliance conforms to all pertinent legal frameworks and stresses the benefits of embedding sophisticated AI tech into its services.

Markus Kasanmascheff
Markus Kasanmascheff
Markus is the founder of WinBuzzer and has been playing with Windows and technology for more than 25 years. He is holding a Master´s degree in International Economics and previously worked as Lead Windows Expert for Softonic.com.