European Commission Takes Closer Look at Microsoft-OpenAI Ties

The European Commission is taking a closer look at the ties between Microsoft and OpenAI.

The regulator is sending a follow-up request for information “to understand whether certain exclusivity clauses could have a negative effect on competitors,” European Commission Executive Vice President Margrethe Vestager said Friday (June 28) in a speech at the regulator’s workshop on “Competition in Virtual Worlds and Generative AI.”

The European Commission’s follow-up request comes after it sent formal information requests under its antitrust rules to several Big Tech players involved in artificial intelligence (AI), aiming to review whether practices like tying and bundling by dominant firms were blocking competitors from accessing essential resources and preventing customers from switching, Vestager said.

“We have reviewed the replies, and are now sending a follow-up request for information on the agreement between Microsoft and OpenAI,” Vestager said.

Vestager also said in the speech that the European Commission has closed another potential investigation — this one centered on the regulator’s merger rules — into the partnership of the two companies, concluding that Microsoft has not acquired control on a lasting basis over OpenAI.

“So we are closing this chapter, but the story is not over,” Vestager said. “We will keep monitoring the relationships between all the key players in this fast-moving sector, including Microsoft and OpenAI.”

The European Commission’s information requests under its antitrust rules focus on Microsoft’s $13 billion investment in OpenAI, and OpenAI’s exclusive use of Microsoft’s cloud technology, Bloomberg reported Friday.

These preliminary questions could lead to formal investigations, which in turn could lead to orders and fines if the European Commission finds antitrust violations, according to the report.

The European Commission said in January that it was reviewing whether Microsoft’s involvement with OpenAI warranted further investigation.

At that time, the regulator invited businesses and experts to share competition issues that they had seen in the virtual world and AI sectors.

Vestager said at the time in a press release: “Virtual worlds and generative AI are rapidly developing. It is fundamental that these new markets stay competitive, and that nothing stands in the way of businesses growing and providing the best and most innovative products to consumers.