The Competition and Markets Authority (CMA) disclosed on Dec. 8 that it would be probing the partnership between a software company and an AI firm, which they believe has created a merger under the Enterprise Act of 2002. The authority will also examine how this situation might impact competition in UK markets for goods or services.
According to a CMA news release, the first phase of the information gathering process will run from December 8 to January 3, 2024, marking the end of the invitation to comment period. The release highlights the unprecedented speed at which AI is scaling, terming this as a crucial juncture in the evolution of this transformative technology. "The invitation to comment is the first part of the CMA’s information gathering process and comes in advance of launching any phase 1 investigation, which would only happen once the CMA has received the information it needs from the partnership parties," said Sorcha O’Carroll, senior director for mergers at CMA.
In late November, Reuters reported that Google had requested that the antitrust organization investigate Microsoft due to its business practices and market dominance. This request was made in addition to an ongoing probe into the country's cloud computing industry initiated in October. Changes to Microsoft’s licensing rules were deemed insufficient by competitors. "As the latest independent data shows, competition between cloud hyperscalers remains healthy. In the second quarter of 2023 Microsoft and Google made equally small gains on AWS, which continues to remain the global market leader by a significant margin," a Microsoft spokesperson told Reuters anonymously.
The invitation to comment stipulates that a relevant merger situation under the Enterprise Act of 2002 meets three criteria: one or more entities become indistinguishable from each other; either turnover test or share of supply test must be met; and that merger must not have already occurred unless it happened no more than four months prior to referral or if it wasn't made public without informing the CMA. The invitation to comment, issued by the CMA, notes that the long-term partnership between OpenAI and Microsoft, coupled with recent governance issues at OpenAI partly involving Microsoft, has triggered this investigation. It suggests that comments should be sent to Microsoft.openAI@cma.gov.uk.