This is an archive article published on June 30, 2024
AI deals between Microsoft and OpenAI, Google and Samsung, in EU crosshairs
EU antitrust regulators are scrutinizing Microsoft's partnership with OpenAI and Google's deal with Samsung over concerns about exclusivity clauses and potential negative effects on competition in the AI market.
The European Commission, which acts as the EU competition watchdog, said Teams had been given a distribution advantage while limitations preventing interaction between Teams' competitors and Microsoft's offerings further hindered rivals. (Image Source: Microsoft)
Microsoft’s opens new tab partnership with OpenAI could face an EU antitrust investigation as regulators singled out their exclusivity clauses while Google’s opens new tab artificial intelligence deal with Samsung opens new tab also triggered scrutiny.
EU antitrust regulators will seek additional third-party views, EU competition chief Margrethe Vestager said on Friday.
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The moves underscore the unease among regulators worldwide on Big Tech leveraging its dominance into the new technology, echoing the companies’ market power in other sectors.
Vestager in March sent questionnaires to Microsoft, Google, Meta’s opens new tab Facebook and ByteDance’s TikTok as well as other big tech companies related to their AI partnerships.
“We have reviewed the replies, and are now sending a follow-up request for information on the agreement between Microsoft and OpenAI. To understand whether certain exclusivity clauses could have a negative effect on competitors,” she told a conference.
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Vestager in March sent questionnaires to Microsoft, Google, Meta’s opens new tab Facebook and ByteDance’s TikTok as well as other big tech companies related to their AI partnerships.
“We have reviewed the replies, and are now sending a follow-up request for information on the agreement between Microsoft and OpenAI. To understand whether certain exclusivity clauses could have a negative effect on competitors,” she told a conference.
Vestager also cited concerns about Big Tech blocking smaller AI developers from reaching users and businesses.
“We are also sending requests for information to better understand the effects of Google’s arrangement with Samsung to pre-install its small model Gemini Nano on certain Samsung devices,” she said.
Google in January reached a multi-year deal with the South Korean company to embed its generative artificial intelligence technology in Samsung’s Galaxy S24 series smartphones.
Vestager also said she was looking into “acqui-hires,” where one company acquires another mainly for its talent, as exemplified in Microsoft’s $650-million acquisition of startup Inflection in March that allowed it to use Inflection’s models and hire most of its staff.
“We will make sure these practices don’t slip through our merger control rules if they basically lead to a concentration,” she said.
The European Commission, which acts as the EU competition watchdog, said Teams had been given a distribution advantage while limitations preventing interaction between Teams' competitors and Microsoft's offerings further hindered rivals. (Image Source: Microsoft) 
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