The US Federal Trade Commission (FTC) is reportedly examining the nature of Microsoft Corp.’s investment in OpenAI Inc., possibly violating antitrust laws. While these inquiries are merely preliminary and there’s no formal investigation opened as yet, the development raises questions about potential antitrust implications of such technology investments. [1]
Microsoft’s investment in OpenAI didn’t require reporting to the FTC under US law, as the investment doesn’t amount to control of the company, a non-profit entity. Nonetheless, agency officials are currently scrutinising the situation and assessing their legal options.
On an international scale, the UK’s Competition and Markets Authority is also making inquiries and gathering information from stakeholders about the collaboration between Microsoft and OpenAI, probing potential threats to competition in the UK, within the realm of artificial intelligence. The agency seeks to make a decision on whether a formal investigation needs opening once they have analyzed all commentary received by January 3.
In an ever-evolving technological landscape, Microsoft has emerged as a stalwart by investing approximately $13 billion in OpenAI and integrating its products into its core businesses, pushing it ahead of other tech firms in the AI space, including Alphabet Inc.’s Google.
The FTC’s scrutiny of the Microsoft-OpenAI deal isn’t isolated, as FTC Chair Lina Khan has previously expressed concerns raised by AI technology. In conjunction, the agency has already started a consumer protection probe into OpenAI, questioning whether their popular AI bot, ChatGPT, exposes consumers’ data and reputations to potential risk.
Khan’s intent to ‘need to be vigilant early’ with transformative tools like artificial intelligence, reflects an early recognition of AI’s potential impact on almost all aspects of people’s lives and its potential to misstep.
It’s worth noting that Khan’s FTC is continuing its challenge of Microsoft’s $69 billion acquisition of video game company Activision Blizzard Inc. Furthermore, the recent incident of firing and subsequent reinstatement of Sam Altman as chief of OpenAI, highlights Microsoft’s increasing influence and the intertwined nature of the two entities.
With the UK’s proactive move, speculation surrounds whether antitrust regulators in other regions, particularly the European Union and the US, will launch similar probes. A European Commission spokesperson expressed that they have been attentively monitoring the situation of control over OpenAI.