Full Disclosure:​

The UK's Competition Regulator investigates OpenAI​

By Jaysen Sutton​
šŸ“© Sign up here to receive a new edition of 'Full Disclosure' directly into your inbox, every week.
Click to expand...

Hi Reader šŸ‘‹šŸ½,

Itā€™s a tough time for M&A, but a good time to have competition lawyers. According to White & Case, the European Commission is more likely to block a merger than ever before. Under Bidenā€™s administration, regulators are ā€˜challenging more cases, attempting to block vertical transactions and scrutinizing acquisitions by private equity firmsā€™.

After Brexit, the UKā€™s competition regulator, the Competition and Markets Authority, seems to be more proactive in investigating deals. This was brought to light in the biggest deal in the video games industry, when the CMA originally blocked Microsoftā€™s acquisition of Activision Blizzard, before allowing it to continue under revised terms. Microsoft was advised by Jones Day, with Slaughter and May advising Activision Blizzard.

On 8 December 2023, the big news is that the CMA is investigating the partnership between Microsoft and OpenAI:

The CMA is considering whether it is or may be the case that Microsoftā€™s partnership with OpenAI, or any changes thereto, has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
Click to expand...

After receiving $13bn in funding from Microsoft, OpenAI entered into a ā€˜strategic partnershipā€™ with the big tech company. The website states Microsoft has no board seat and no control, although the recent drama surrounding OpenAI led to Microsoft taking a ā€˜non-votingā€™ observer on OpenAIā€™s board. I expect the CMA wants to better understand the true relationship between Microsoft and OpenAI, given the role both companies will play in the future of our technology industry.


Have any thoughts? I'd love to hear your perspective below!

ā“Contact [email protected] with any queries.