EU launches investigations into Microsoft over security software practices, Mistral AI investment

European Union regulators are reportedly investigating Microsoft Corp. over limiting customers from using competing security software and its investment in artificial intelligence company Mistral AI.

According to The Information, the first investigation relates to a claim that Microsoft is preventing its customers from buying security software from its competitors. The European Commission, the EU’s competition watchdog, is said to be examining Microsoft’s Entra ID software, previously known as Azure Active Directory, specifically that Microsoft doesn’t allow customers of Office 365 to use alternative security products.

On the AI front, Politico reports that the EC plans to look into Microsoft’s new partnership with French artificial intelligence company Mistral.

Mistral and Microsoft announced on Monday a new alliance that will give Mistral’s engineers access to supercomputing infrastructure in Azure and that Microsoft will give customers access to Mistral’s large language models on its cloud platform. As part of the deal, Microsoft also said that it was investing €15 million ($16.3 million) into the company, which will convert to equity in the startup’s next funding round.

It was noted at the time of the announcement that Microsoft was downplaying the investment partly because of the possibility that the EC would look into the deal. Now, the EC is.

“The Commission is looking into agreements that have been concluded between large digital market players and generative AI developers and providers,” EC spokesperson Lea Zuber said in a statement. “In this context, we have received the mentioned agreement, which we will analyze.”

The new investigation is yet another hurdle for Microsoft in the rapidly developing AI market. In December, the U.K. Competition and Markets Authority launched a similar review of Microsoft’s investment in OpenAI. The CMA is seeking to determine whether Microsoft’s investment in OpenAI qualifies as a so-called relevant merger situation, a situation in which two companies “cease to be distinct” or are nearing such an outcome.

The U.S. Federal Trade Commission is also reportedly reviewing the Microsoft-OpenAI partnership as well. An inquiry into the partnership is reportedly at a preliminary stage.

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