British competition watchdog examines partnership between Microsoft and OpenAI

LONDON (Reuters) – Britain’s Competition and Markets Authority (CMA) said on Friday it will consider launching an investigation into the partnership between Microsoft and OpenAI, after the start-up creating the ChatGPT software said the US tech giant would receive a non-voting seat on its board of directors.

The CMA said on Friday that the investigation will focus on whether the merger gave rise to an “acquisition of control”, that is to say a material influence of one party over another.

This is the second time this year that the British competition watchdog has looked into Microsoft’s activities. The CMA also indicated that it will examine whether the transaction resulted in the creation of a merger situation.

“There have been a number of developments in the governance of OpenAI recently, some of which involve Microsoft,” the CMA said.

“In light of these developments, the CMA is now issuing an ITC to determine whether the Microsoft/OpenAI partnership, including recent developments, has given rise to a relevant merger situation and, if so, the potential impact on competition,” added the authority.

The move follows the November announcement that Microsoft would create a non-voting position on the OpenAI board of directors.

“The only thing that has changed is that Microsoft will now have a non-voting observer on the OpenAI board, which is very different from an acquisition like Google’s acquisition of DeepMind in the UK,” he said. said Brad Smith, president of Microsoft, in a statement.

He added that Microsoft would work closely with the CMA. OpenAI did not immediately respond to a request for comment.

(Reporting by Muvija M and Sarah Young in London; with contributions from Foo Yun Chee in Brussels and Chavi Mehta in Bangalore; French version Augustin Turpin, editing by Kate Entringer)