Michelle ThompsonThe UK’s Competition and Markets Authority (CMA) has concluded its inquiry into Microsoft’s partnership with OpenAI, the company behind ChatGPT.
The investigation assessed whether Microsoft’s involvement with OpenAI had changed following the brief dismissal and reinstatement of CEO Sam Altman. Despite Microsoft’s multibillion-dollar investment and exclusive access to some OpenAI technologies, the CMA determined that the partnership remained unchanged and did not meet the criteria for a merger review under UK regulations.
Digital rights group Foxglove criticized the decision, claiming it weakened the regulator’s authority. The CMA launched the probe in December 2023 after Microsoft reportedly influenced OpenAI’s decision to reinstate Altman.
While the CMA acknowledged that Microsoft has significant influence over OpenAI’s commercial strategy, it found no evidence of full control. As a result, the partnership does not qualify for further scrutiny under UK merger laws.
CMA Executive Director for Mergers, Joel Bamford, clarified that this ruling does not eliminate potential competition concerns but that the regulator must operate within its legal framework.
“Nothing to report here.”
Critics argue that the CMA’s decision is influenced by the changing political landscape in which it now operates. The UK government has urged regulators to find ways to boost economic growth, and in January, it replaced the CMA chair, Marcus Bokkerink, after dissatisfaction with his approach to this directive. Doug Gurr, former Amazon UK head, was appointed as the interim chair.
Rosa Curling, co-executive director of Foxglove, remarked that the CMA delayed the decision for over a year, but after Gurr’s appointment, it quickly concluded that there were no issues. She expressed concerns that this indicated Big Tech had persuaded the government to weaken the competition watchdog, allowing tech giants to dominate emerging technologies, just as they did with previous ones.
In response to these criticisms, the CMA pointed to a LinkedIn post by Joel Bamford, which acknowledged the prolonged investigation but emphasized that it was due to the evolving nature of Microsoft’s relationship with OpenAI. The CMA also noted that speed matters to business confidence and investment. Earlier, under Bokkerink’s leadership, the CMA made similar “found not to qualify” decisions regarding other AI partnerships involving Microsoft, Amazon, and Google.
In April of the same year, CMA Chief Executive Sarah Cardell expressed concerns about the growing “interconnected web” of AI partnerships between major tech companies. However, in February, the UK government instructed the CMA to focus on “pro-growth and pro-investment interventions.” This direction aligned with the UK’s stance at a summit in Paris, where it, along with the US, refrained from signing an agreement on AI. US Vice President JD Vance argued that excessive AI regulation could stifle a burgeoning industry.
Chloe Birkett, a competition lawyer at Freeths, noted that while the CMA would adopt a less interventionist approach to competition and merger reviews, it would not approve every deal without scrutiny. She emphasized that the CMA’s role is to maintain competition in markets, ensuring consumers receive fair deals.
Microsoft, in its statement, welcomed the CMA’s decision, asserting that its partnership with OpenAI fosters competition, innovation, and responsible AI development. The company also highlighted the CMA’s careful and thoughtful assessment of the commercial realities before concluding the investigation.
