EU Probes Tech Giants for AI Competition Concerns

The European Union has launched an investigation into various artificial intelligence collaborations and acquisitions involving tech giants such as Microsoft, OpenAI, Google, and Samsung. The main focus of this scrutiny, carried out by the European Commission, is to determine if these agreements might negatively impact competition and innovation within the AI sector.

To gain a deeper understanding of the agreements, the Commission has distributed questionnaires to the involved entities. The investigation spans several significant AI-related transactions, including Microsoft’s purchase of Nuance Communications, OpenAI’s collaboration with Microsoft, and Google’s takeover of DeepMind.

One of the key concerns for the EU is the potential creation of entry barriers for new AI firms, possible unauthorized data sharing among competitors, and whether these deals have allowed the transfer of critical AI technology and knowledge to these already dominant market players.

Specifically, Microsoft’s acquisition of Nuance Communications, which specializes in voice recognition and natural language processing, has stirred up fears about Microsoft’s increasing influence in the AI domain. The transaction, announced in April 2021 and valued at $19.7 billion, is anticipated to be finalized in the first half of 2022.

The EU is also scrutinizing the July 2019 partnership between Microsoft and OpenAI, particularly regarding the exclusivity Microsoft has over OpenAI’s AI technologies in return for cloud computing support and investment. The concern is this exclusivity could restrict other organizations from accessing OpenAI’s innovations.

Similarly, Google’s 2014 acquisition of DeepMind, a prominent AI research firm, has been questioned. This acquisition is viewed as potentially giving Google an overwhelming advantage in AI development and limiting competitive dynamics within the industry.

Additionally, Samsung’s acquisition of AI startup Kngine in November 2017 is being examined for similar reasons, including concerns over data sharing and market entry restrictions.

This extensive investigation by the EU into the AI agreements is part of a larger initiative to maintain a competitive and innovative AI landscape. Previously, the European Commission has expressed concerns about the monopolistic tendencies of a few major players in the AI industry and has advocated for stricter regulations to curb any misuse of corporate power.

The outcome of this EU investigation may take several months to unfold, and it remains unclear if any regulatory actions will follow. Nonetheless, this move underscores a clear intention by the EU to closely monitor and potentially regulate AI industry practices to foster a healthier competitive environment.