AI Agreements Between Microsoft and OpenAI, Google, and Samsung in the EU crosshairs

EU officials are looking into whether Microsoft’s deal with OpenAI and Google’s AI partnership with Samsung violate antitrust laws. They want to make sure that Big Tech’s exclusive agreements don’t hurt competition.

EU officials have singled out Microsoft’s deal with OpenAI for an antitrust investigation because of their exclusivity clauses. We have also closely examined Google’s AI deal with Samsung. To get more opinions from outside the EU, antitrust regulators will ask for them, said EU competition chief Margrethe Vestager on Friday.

The moves show that regulators around the world are worried about how Big Tech is using its power to take advantage of new technologies. This is similar to how the companies use their market power in other areas.

For her part, Vestager sent surveys to Microsoft, Google, Meta‘s Facebook, ByteDance‘s TikTok, and other large tech companies in March about their AI partnerships. We reviewed the replies and are now sending a follow-up request to gather more information about the deal between Microsoft and OpenAI. In a conference speech, she said, “To find out whether certain exclusivity clauses could hurt competitors.”

Reuters was the first to report that EU regulators were putting together a case that could lead to an investigation into the two companies’ partnership.

A Microsoft representative said, “We are ready to answer any other questions the European Commission may have.” Due to the lack of control, Vestager said that Microsoft’s partnership with OpenAI will not be subject to EU merger rules.

OpenAI’s parent company is a non-profit, but Microsoft has put $13 billion into a for-profit subsidiary, giving them a 49% stake.

Vestager was also worried that Big Tech would make it difficult for smaller AI developers to reach businesses and users. She added, “We are also sending requests for information to understand better the effects of Google‘s arrangement with Samsung to pre-install its small model Gemini Nano on certain Samsung devices,” she added.

Google and Samsung Forge AI Partnership for Galaxy S24

Google and the South Korean company signed a multi-year deal in January to put Google’s generative AI technology into Samsung’s Galaxy S24 series smartphones.

Vestager also said she was looking into “acqui-hires,” which are deals where one company buys another mainly for its employees.

In March, Microsoft acquired startup Inflection for $650 million, allowing it to use Inflection’s models and hire most of its staff.

She said, “We will ensure these practices don’t slip through our merger control rules if they lead to concentration.”