The European Union is potentially poised to launch an antitrust investigation into Microsoft's partnership with OpenAI and Google's artificial intelligence (AI) deal with Samsung, driven by concerns surrounding exclusivity clauses in these agreements. Margrethe Vestager, the EU competition chief, announced that regulators would be gathering additional third-party opinions on these deals. This step underscores a broader regulatory anxiety regarding Big Tech's extension of market dominance into emerging technological sectors.

In March, Vestager took proactive measures by dispatching questionnaires to major technology firms such as Microsoft, Google, Facebook (now Meta), and TikTok. These inquiries aimed to gather information on their AI partnerships. The responses from these companies have prompted the EU to issue follow-up requests for more detailed information, with particular focus on Microsoft's agreement with OpenAI. The primary concern revolves around whether the exclusivity clauses embedded within this partnership could potentially harm competition by restricting access to critical AI technologies and thereby disadvantaging other competitors in the market.

Reuters was the first to report that the EU is actively building a case that could culminate in a formal investigation into the partnership between Microsoft and OpenAI. Vestager has clarified that Microsoft's partnership with OpenAI does not fall under the EU's merger rules due to the absence of control. This distinction is crucial because, while OpenAI operates as a nonprofit organization, Microsoft has made significant investments amounting to USD 13 billion in OpenAI's for-profit subsidiary, effectively securing a 49 percent stake. This substantial investment underscores the strategic importance of the partnership to Microsoft and raises questions about market power and competitive practices.

Google's agreement with Samsung, inked in January, is also drawing regulatory scrutiny. This deal involves embedding Google's generative AI technology into Samsung's Galaxy S24 series smartphones. The integration of advanced AI technologies into widely used consumer devices such as smartphones has significant implications for market dynamics and competition, warranting close examination by regulators.

In addition to these high-profile partnerships, Vestager is also turning her attention to the practice of "acqui-hires," where companies acquire other firms primarily to gain access to their talent and technology. An example of this is Microsoft's USD 650-million acquisition of Inflection, a startup that allowed Microsoft to leverage Inflection's models and hire a majority of its staff. This practice raises further concerns about the consolidation of talent and technology within a few dominant players, potentially stifling innovation and competition in the industry.

The EU's scrutiny of these AI partnerships and acquisitions reflects a broader regulatory effort to ensure that the rapid advancement and integration of AI technologies do not lead to anti-competitive practices that could harm consumers and stifle innovation. By examining these deals closely, the EU aims to maintain a balanced and competitive market environment in the face of evolving technological landscapes.