Microsoft is under CMA’s radar for its partnership with OpenAI

The US Federal Trade Commission (FTC) is also looking into the possibility that the investment broke antitrust laws

After the startup's boardroom dispute that resulted in CEO Sam Altman's abrupt resignation and reappointment, Microsoft's collaboration with ChatGPT maker OpenAI is being investigated for antitrust violations in the US and the UK, according to a report from the British regulator and the media. Following the dramatic incident last month, a new three-member first board appointed Microsoft, a significant OpenAI sponsor, as an observer with no voting rights. The representative from Microsoft is allowed to observe OpenAI board meetings and obtain private information, but he or she is not allowed to cast a vote on decisions like selecting or electing directors. The businesses have not disclosed the identity of the Microsoft representative who will hold the non-voting seat or the composition of the final OpenAI board.

The parent firm of OpenAI is a non-profit organization, which is not often the subject of antitrust investigations. A source claims that it established a for-profit subsidiary in 2019, of which Microsoft controls 49%. Asserting that it does not "own any portion" of OpenAI and that it is entitled to a portion of revenues, a Microsoft representative refuted this on Friday, claiming that the specifics of the deal are proprietary. In order to determine whether Microsoft's investment could harm UK competition, the CMA is considering whether to open an investigation. According to Bloomberg News, the US Federal Trade Commission (FTC) is also looking into the possibility that the investment broke antitrust laws.