European Union's antitrust watchdogs are preparing to question competitors about OpenAI Inc.'s reliance on Microsoft's cloud technology, adding further scrutiny to Microsoft Corp.'s $13 billion investment in the company.

Microsoft-OpenAI Investment

Margrethe Vestager, the bloc's antitrust chief, stated on Friday (June 28) that the EU has decided not to pursue an investigation into the deal under the EU's merger rules.

Instead, it was revealed that regulators are currently inquiring about Microsoft's exclusivity clauses with OpenAI and their potential impact on competition. Rivals of the US company are being questioned to gather more information

In addition to Microsoft, the EU will also be inquiring about Google's partnership with Samsung Electronics Co. to pre-install its "Gemini nano" on specific devices.

According to Bloomberg, EU regulators are expressing interest in further examining the exclusive cloud provider arrangement between Microsoft and OpenAI, as part of their ongoing investigation.

When the EU poses initial inquiries, it can result in the initiation of official investigations by the EU's antitrust regulators. These investigations, over time, may lead to mandates for behavior change and possible penalties if regulators uncover proof of unfair practices that hinder competition.

Additional third-party perspectives will be sought by EU antitrust regulators, according to Vestager.

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EU Antritrust Inquiries Against Big Tech Companies

The recent actions highlight the concerns among regulators globally regarding the ability of Big Tech to exploit its dominant position in the emerging technology, mirroring their market influence in other industries.

In March, Vestager sent questionnaires to major tech companies, including Microsoft, Google, Meta, Facebook, and ByteDance's TikTok, regarding their AI partnerships.

According to Reuters, a Microsoft spokesperson stated that they are prepared to address any further inquiries from the European Commission.

Although OpenAI's parent organization operates as a nonprofit, Microsoft has made a substantial investment of $13 billion in a for-profit subsidiary, giving them a potential 49% ownership.

In January, Google and a South Korean company signed a multi-year deal to integrate Google's generative artificial intelligence technology into Samsung's upcoming Galaxy S24 series smartphones.

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