EU probes Microsoft-OpenAI and Google-Samsung AI deals

The European Union has intensified its antitrust scrutiny on AI deals, starting with high-profile collaborations between Microsoft-OpenAI and Google-Samsung.

Margrethe Vestager, the European Commission’s executive vice president for competition policy, warned that AI is “developing at breakneck speed” and revealed that multiple preliminary investigations are underway into various AI-related market practices. Her concerns about potential anti-competitive practices stem from major tech companies’ manoeuvres in the AI sector since the advent of ChatGPT.

The commission’s move highlights the bloc’s growing concern over tech giants’ potential monopolistic power in the rapidly evolving AI sector. The scrutiny focuses on recent deals and collaborations involving Microsoft and Google in AI. These initiatives, often involving strategic partnerships and acquisitions, have drawn regulatory attention due to their potential to undermine competition and innovation. 

Vestager emphasised that the commission has several preliminary antitrust investigations underway concerning various practices within AI-related markets, although specific details were not disclosed.

Microsoft’s partnership with OpenAI

Microsoft’s multibillion-dollar partnership with OpenAI represents one of the most significant collaborations in the AI industry. This partnership, initiated in 2019 and expanded in subsequent years, involves Microsoft investing heavily in OpenAI, providing cloud computing resources through its Azure platform, and integrating OpenAI’s advanced models into Microsoft’s products and services. 

The collaboration aims to accelerate AI research and development, with notable advancements such as the GPT-3 language model and the more recent ChatGPT. However, this alliance has raised concerns about market dominance and potential barriers to entry for smaller AI firms. Vestager said in a speech that the European Commission started reviewing the deal last year to see whether it broke EU merger rules but dropped it after concluding Microsoft hadn’t gained control of OpenAI. 

“Microsoft has invested $13 billion in OpenAI over the years. But we have to make sure that partnerships like this do not become a disguise for one partner getting a controlling influence over the other,” she said while signalling that the commission would take another tack to examine the deal and the industry more broadly. It’s using the bloc’s antitrust rules, which target abusive behaviour by companies with a dominant market position.

After reviewing responses from major AI companies requested in March this year, the EU Commission is requesting specific information about the Microsoft-OpenAI agreement. Vestager said they aim to determine if exclusivity clauses could potentially harm competition in the AI market. The EU wants “to understand whether certain exclusivity clauses could hurt competitors,” she said.

Also in question: Google and Samsung’s partnership

Google’s AI-related arrangement with Samsung also draws significant attention. The partnership leverages Samsung’s hardware capabilities with Google’s AI prowess to develop innovative consumer electronics and mobile technologies. This includes integrating Google’s AI algorithms into Samsung devices and enhancing features like voice recognition, camera functionality, and personalized user experiences. 

While this collaboration promises to bring advanced AI-driven functionalities to a broad consumer base, it also raises questions about competitive fairness, particularly regarding access to critical technologies and market influence. Vestager said EU regulators have sent information requests “to better understand the effects of Google’s arrangement with Samsung” to pre-install Gemini Nano,  the smallest version of Google’s Gemini AI foundation model,  on some devices from the South Korean tech company. 

What’s next?

With tech giants like Microsoft and Google, also prominent players in the global AI landscape, actively expanding their AI capabilities through acquisitions and partnerships, regulators are growing more curious about market dominance and its implications for fair competition. This would have inevitably prompted regulatory intervention from the EU sooner or later.

In response to the EU’s actions, Microsoft and Google have reaffirmed their commitment to comply with regulatory requirements while continuing to innovate responsibly in AI technologies. They emphasise the potential benefits of their AI initiatives, including advancements in healthcare, sustainability, and other critical sectors.

Yet, the outcome of the EU’s antitrust scrutiny could have significant implications for how major tech companies operate in Europe’s AI market. It may lead to regulatory measures to foster a more level playing field and ensure that smaller competitors have fair opportunities to compete and innovate.

(Photo by Guillaume Périgois)

See also: Coalition of news publishers sue Microsoft and OpenAI

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Tags: ai, artificial intelligence, europe, european commission, Google, microsoft, openai, Samsung

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