Technology giant Microsoft Corporation (NASDAQ:MSFT) made headlines in early 2023 with a $10-billion investment in OpenAI, the parent company of ChatGPT.
A year later, Microsoft’s partnership with OpenAI is drawing the attention of the U.S. Department of Justice and the Federal Trade Commission, which could result in future investigations.
What Happened: According to a report from Politico, the Justice Department and FTC are discussing which agency is able to probe OpenAI over its partnership with Microsoft. The complaint comes over antitrust concerns surrounding the partnership.
Politico said the FTC entered talks with the Justice Department months ago to seek out which agency would be best served to review the partnership. Both agencies want to go after the partnership and don’t want to give up jurisdiction, which has led to a delay in a potential review, the report said.
Microsoft and OpenAI did not report the deal for review to the antitrust regulators, according to the report. Microsoft stated it does not have control of OpenAI, which is controlled by a nonprofit organization.
The hiring of OpenAI CEO Sam Altman by Microsoft days after he was fired by OpenAI is one factor in the antitrust concerns.
The Justice Department and FTC allege that the partnership of Microsoft and OpenAI could give the companies an unfair advantage in the artificial intelligence market.
Related Link: Microsoft’s Q1 Earnings Spotlight: Revenue Beat, EPS Jumps 27%, Rapid AI Infusion
Why It’s Important: There is no rule against two federal agencies investigating on antitrust concerns, but one unit generally handles a case.
Politico highlighted a 2019 agreement between the FTC and Justice Department that the FTC would investigate technology giants Meta Platforms and Amazon over monopolization concerns, while Justice Department would target Google and Alphabet, splitting up four big tech companies.
The Justice Department ended up investigating Meta as well, which increased tension between the two agencies before the Justice Department dropped its pursuit, Friday’s report said.
The FTC said in a statement that the two organizations work “in harmony,” as shared by Politico.
“Our join clearance process with the DOJ is seamless, and that lets both agencies effectively use their resources to protect American…
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