The UK is contemplating an inquiry into Microsoft’s collaboration with OpenAI to assess whether it constitutes an “acquisition of control” subject to antitrust regulations, as stated by the Competition and Markets Authority (CMA) today. The regulatory body has expressed its intent to examine “recent developments,” likely alluding to the CEO ousting controversy involving Sam Altman, in which Microsoft played a significant role.
The CMA has initiated an Initial Enforcement Order (ITC) to ascertain whether the Microsoft/OpenAI partnership, taking into account recent events, has led to a pertinent merger situation and, if so, what potential implications it might have on competition. The news release highlights that the CMA will evaluate whether the partnership has resulted in an acquisition of control, signifying a scenario where one party gains substantial influence, de facto control, or holds over 50% of the voting rights over another entity.
The regulatory body highlighted the “close and multifaceted” nature of the partnership, encompassing a substantial investment by Microsoft, collaborative efforts in technology development, and cloud services. It emphasized that both companies are extensively involved in financial and related markets, directly impacting investors through their business activities. The regulator also pointed out Microsoft’s recent involvement in developments related to OpenAI’s governance.
During the ousting of Sam Altman by OpenAI’s board, Microsoft intervened by hiring him, and a majority of OpenAI’s staff considered moving to Microsoft. Following these events, OpenAI’s board eventually reinstated Altman as CEO. A New Yorker exposé on the incident noted that Microsoft executives perceived Altman’s return as the best possible outcome.
