UK Competition Regulator Investigates Microsoft’s Connections to OpenAI

The Competition and Markets Authority (CMA) in the UK is considering whether Microsoft’s partnership with OpenAI constitutes an “acquisition of control” that is subject to antitrust law. The regulator mentioned the recent drama involving the ousting of CEO Sam Altman and stated that it is issuing an Initial enforcement order (IEO) to determine the potential impact on competition.

The CMA highlighted the multi-billion dollar investment by Microsoft, technology development cooperation, and cloud services as part of the “close and multifaceted” partnership with OpenAI. It emphasized the significant activities of both firms in financial and related markets.

Microsoft’s involvement in the developments related to OpenAI’s governance, specifically the hiring of Sam Altman after his ousting by OpenAI’s board, was also noted. The CMA is now seeking views on the potential impact of the partnership on competition in the UK and whether it constitutes a relevant merger situation.

If an investigation is launched, it would be the second one involving Microsoft in the last year, following the company’s Activision Blizzard acquisition. The UK’s previous probe into the Activision Blizzard acquisition had material effects, as Microsoft agreed to sell game streaming rights to Ubisoft to satisfy the CMA.