The European Union is amplifying its oversight of the artificial intelligence industry, including a renewed examination of Microsoft’s significant investment in OpenAI. Last year, the European Commission examined the partnership between Microsoft and Open AI for the first time.
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The aim of the case was to find out whether the deal violated the European Union merger rules. However, the investigation ended with the conclusion that Microsoft did not get control of OpenAI. However, Margrethe Vestager, the commission’s executive vice president for competition policy, pointed out that it is crucial to avoid a situation where one party hides behind cooperation to subordinate another party.
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Microsoft has pumped in $13 billion into OpenAI and this has raised eyebrows over monopolistic tendencies. The Commission is now using the EU’s antitrust rules which deal with abuse of the dominant market position by firms. This new approach shows the EU’s concern in ensuring that there is fair competition within the AI sector.
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In March, the Commission addressed information requests to the biggest AI companies: Microsoft, Google, Facebook, and TikTok. Based on the responses received, the Commission is sending follow-up questions focusing only on the Microsoft-OpenAI agreement. This seeks to determine whether these contracts’ exclusivity provisions may harm competition.
“We appreciate the European Commission’s thorough review and its conclusion that Microsoft’s investment and partnership with OpenAI does not give Microsoft control over the company.”
Microsoft Spokesperson
“We stand ready to respond to any additional questions the European Commission may have,” the spokesperson added.
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This enhanced focus highlights the EU as the global leader in regulating big technology firms and the AI industry. The EU’s AI Act, which is expected to become the first-ever comprehensive regulation of AI, is a clear example of such an approach. The Act deals with several issues, including market power and consumer choice in foundation models that are the basis of generative AI applications such as chatbots.
Vestager has noted that actions are still being taken concerning Google’s agreement with Samsung regarding the Gemini Nano on some gadgets. The smallest of Google’s Gemini AI foundation models is Gemini Nano. The commission wants to know the effects of such agreements on market competition and consumers’ decisions.
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Another issue that concerns the commission is the so-called “acqui-hire”, when one company buys another one mainly for its employees. To this end, the hiring of Mustafa Suleyman by Microsoft from the firm that he founded, Inflection AI, is being investigated to make sure that this is not in a bid to avoid the merger control rules that may lead to market concentration.
“We will ensure these practices do not slip through our merger control rules if they essentially result in a concentration.”
Vestager
The EU’s regulatory actions set the pace for the world in its attempts to address the further development of the AI industry. The new AI Act that is to be introduced is the first-ever set of rules on the regulation of AI on an international level. The Commission is also looking into Google’s arrangement with Samsung to install the Gemini Nano AI model on some of Samsung’s gadgets. The objective of this present analysis is to examine the possible effects on competition and consumer choice.
Cryptopolitan reporting by Brenda Kanana
