FTC Intensifies Scrutiny on Microsoft's AI Alliances Amid Antitrust Concerns
Microsoft is currently under the lens of the U.S. Federal Trade Commission (FTC) as it ramps up a comprehensive antitrust investigation, drawing attention to Microsoft's collaboration with OpenAI, the creator of ChatGPT. This development comes on the heels of recent reports suggesting Microsoft's involvement in potentially anti-competitive practices linked to its agreements with OpenAI.
The core issue involves a deal granting Microsoft exclusive rights to run OpenAI's models on its cloud servers, along with a share of OpenAI's revenue. The FTC is scrutinizing these transactions to determine if Microsoft's dominant position in the cloud computing market gives it undue advantages in the AI software sector. Part of this inquiry involves assessing how Microsoft integrates OpenAI's tools, such as the Copilot software, and how it resells these AI models via its Azure platform.
This investigation is part of a broader probe initiated last year, focusing on players in the cloud computing space, like Microsoft, amid rising concerns over market power and anti-competitive practices. Earlier this year, the FTC commenced specific investigations into the Microsoft-OpenAI deal and similar investments by tech giants like Google and Amazon in AI startups like Anthropic. Last month, the FTC took further action by sending civil investigative demands (CIDs) to Microsoft and other related stakeholders, as part of their legal framework to gather crucial information.
In response to media reports about this investigation, Microsoft's Vice President and Deputy General Counsel, Rima Alaily, criticized the FTC for allegedly leaking confidential details about the probe, claiming these revelations breach the agency’s ethical guidelines. Microsoft has called for the FTC's Inspector General to investigate these leaks and make the findings public, arguing that they were unaware of the FTC’s demands until media outlets highlighted the investigation.
While Microsoft has historically evaded significant antitrust scrutiny compared to its tech contemporaries, its recent operational activities, including network security concerns, acquisitions like Activision Blizzard, and partnerships with entities like OpenAI, have subjected the company to increased regulatory examination both in the U.S. and Europe. This ongoing scrutiny underscores the shifting landscape of antitrust law as regulators adapt to rapid technological advancements in the industry.