Microsoft Corp’s (NASDAQ:MSFT) significant $13 billion investment in OpenAI Inc will not undergo a formal investigation by the European Union’s merger watchdogs, alleviating concerns about potential regulatory interventions.
The European Commission concluded that the collaboration does not constitute a takeover, and Microsoft does not exercise control over OpenAI’s operations.
The decision follows scrutiny sparked by revelations of Microsoft’s close relationship with the ChatGPT developer, leading to a review under the EU’s merger regulation, Bloomberg cites familiar sources.
Also Read: After The EU, Microsoft Faces Cloud Computing Antitrust Scrutiny in South Africa
However, the EU typically only approves most deals with unresolved competition issues.
Microsoft referenced a previous statement emphasizing that the partnership with OpenAI promotes innovation and competition while maintaining both companies’ independence.
The Commission’s spokesperson highlighted that to address any competition concern, a permanent change of control between the companies needs to be established.
The U.K.’s Competition and Markets Authority (CMA) is scrutinizing Microsoft’s partnership with OpenAI and may investigate their collaboration for potential competition issues.
Microsoft is in talks with the Cloud Infrastructure Services Providers in Europe (CISPE) to resolve a complaint filed with the European Union about the tech giant’s cloud computing licensing practices.
The complaint, launched in late 2022 by CISPE, which includes Amazon.Com Inc (NASDAQ:AMZN) and 26 smaller EU cloud providers, charges Microsoft with contractual conditions that negatively affect Europe’s cloud computing market.
Over the last decade, Microsoft has incurred €1.6 billion in EU antitrust fines.
Microsoft stock gained over 42% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Technology (NYSE:XLK) and Fidelity MSCI Information Technology Index ETF (NYSE:FTEC).
Price Action: Microsoft shares traded lower by 0.73% at $411.55 on the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Microsoft and OpenAI. Photo via Shutterstock
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This article EU Clears Microsoft’s $13B OpenAI Investment from Formal Probe: A Relief for Tech Giants originally appeared on Benzinga.com
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