Dutch Competition Regulator Seeks Expanded Powers Following EU's Decision on Microsoft-Inflection Deal
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On Thu, 19 Sept, 4:07 PM UTC
6 Sources
6 Sources
[1]
Dutch competition regulator wants more power after EU drops probe of Microsoft's Inflection takeover
AMSTERDAM (Reuters) - The Dutch market regulator said on Thursday it needed more powers to investigate deals at its own level, a day after the European Union antitrust regulators said they would not take actionagainst Microsoft's hiring of artificial intelligence startup Inflection's staff. In a statement, the Netherlands Authority of Consumers and Markets (ACM) said it remained to be seen if that deal will have any "negative consequences" for consumers and businesses in the country. "That is why we believed that an investigation was necessary. The ability to assess the effects of these types of acquisitions and to prevent market power does not exist at this moment," said Martijn Snoep, ACM's chairman of the board. "In order to be able do so, ACM requires a new power. It would also restore the ability of ACM to refer these types of acquisitions that have effects across Europe to the European Commission." (Reporting by Toby Sterling and Benoit Van Overstraeten; Editing by Tomasz Janowski)
[2]
Dutch Competition Regulator Wants More Power After EU Drops Probe of Microsoft's Inflection Takeover
AMSTERDAM (Reuters) - The Dutch market regulator said on Thursday it needed more powers to investigate deals at its own level, a day after the European Union antitrust regulators said they would not take actionagainst Microsoft's hiring of artificial intelligence startup Inflection's staff. In a statement, the Netherlands Authority of Consumers and Markets (ACM) said it remained to be seen if that deal will have any "negative consequences" for consumers and businesses in the country. "That is why we believed that an investigation was necessary. The ability to assess the effects of these types of acquisitions and to prevent market power does not exist at this moment," said Martijn Snoep, ACM's chairman of the board. "In order to be able do so, ACM requires a new power. It would also restore the ability of ACM to refer these types of acquisitions that have effects across Europe to the European Commission." (Reporting by Toby Sterling and Benoit Van Overstraeten; Editing by Tomasz Janowski)
[3]
Dutch competition regulator wants more power after EU drops probe of Microsoft's Inflection takeover
AMSTERDAM, Sept 19 (Reuters) - The Dutch market regulator said on Thursday it needed more powers to investigate deals at its own level, a day after the European Union antitrust regulators said they would not take action against Microsoft's (MSFT.O), opens new tab hiring of artificial intelligence startup Inflection's staff. In a statement, the Netherlands Authority of Consumers and Markets (ACM) said it remained to be seen if that deal will have any "negative consequences" for consumers and businesses in the country. Advertisement · Scroll to continue "That is why we believed that an investigation was necessary. The ability to assess the effects of these types of acquisitions and to prevent market power does not exist at this moment," said Martijn Snoep, ACM's chairman of the board. "In order to be able do so, ACM requires a new power. It would also restore the ability of ACM to refer these types of acquisitions that have effects across Europe to the European Commission." Reporting by Toby Sterling and Benoit Van Overstraeten; Editing by Tomasz Janowski Our Standards: The Thomson Reuters Trust Principles., opens new tab
[4]
Dutch competition regulator wants more power after EU drops probe of Microsoft's Inflection takeover
AMSTERDAM (Reuters) - The Dutch market regulator said on Thursday it needed more powers to investigate deals at its own level, a day after the European Union antitrust regulators said they would not take actionagainst Microsoft's hiring of artificial intelligence startup Inflection's staff. In a statement, the Netherlands Authority of Consumers and Markets (ACM) said it remained to be seen if that deal will have any "negative consequences" for consumers and businesses in the country.
[5]
Dutch competition regulator wants more power after EU drops probe of Microsoft's Inflection takeover
The Dutch market regulator said on Thursday it needed more powers to investigate deals at its own level, a day after the European Union antitrust regulators said they would not take action against Microsoft's hiring of artificial intelligence startup Inflection's staff. In a statement, the Netherlands Authority of Consumers and Markets (ACM) said it remained to be seen if that deal will have any "negative consequences" for consumers and businesses in the country. "That is why we believed that an investigation was necessary. The ability to assess the effects of these types of acquisitions and to prevent market power does not exist at this moment," said Martijn Snoep, ACM's chairman of the board. "In order to be able do so, ACM requires a new power. It would also restore the ability of ACM to refer these types of acquisitions that have effects across Europe to the European Commission." Published - September 19, 2024 04:39 pm IST Read Comments
[6]
Netherlands protests against EU dropping Microsoft AI probe
Concerns over the elimination of a future competitor through acquihiring The Netherlands Authority for Consumers and Markets (ACM) has declared it needs fresh powers after the European Commission elected not to investigate Microsoft's acquihire of AI startup Inflection. The UK's regulator, the Competition and Markets Authority (CMA), itself decided the deal was too small to bother with earlier this month. And yesterday the Commission said it would not open an investigation into the affair after member states withdrew their referral requests in light of the European Court of Justice's judgment in the Illumina/GRAIL case. Illumina prevailed in Europe's top court earlier in September over its $7.1 billion acquisition of diagnostic test maker GRAIL. The win meant an end to the Commission accepting referrals for acquisitions that did not meet revenue thresholds but could eventually result in market distortions. Such as, for example, a tech giant picking up a startup that hasn't much revenue right now, but could present competition in the future. Martijn Snoep, ACM board chairman, said: "It remains to be seen whether Microsoft's stronger position after acquiring Inflection has any negative consequences for consumers and businesses in the Netherlands, such as fewer options or reduced innovation. That is why we believed that an investigation was necessary. "The ability to assess the effects of these types of acquisitions and to prevent market power does not exist at this moment. In order to be able to do so, ACM requires a new power. It would also restore the ability of ACM to refer these types of acquisitions that have effects across Europe to the European Commission." Microsoft did not wish to comment on the ACM's announcement. Earlier this year, the software giant announced the formation of a new AI division headed by Mustafa Suleyman and Karén Simonyan, two of the three founders of Inflection. Both had previously worked at DeepMind, which was acquired by Google in 2014. According to reports, most of the AI startup's 70 employees came along as part of the deal. The move, which could be seen as acquisition by hiring, triggered interest from regulators already considering Microsoft's investment in OpenAI and the company's stake in Mistral. The ACM withdrew its referral request over Microsoft's move since it does not yet have the power to assess acquisitions that fall below the notification thresholds - in this instance, the relatively low turnover of Inflection. ®
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The Dutch competition watchdog calls for increased authority after the European Union halts its investigation into Microsoft's acquisition of Inflection AI. This development highlights the challenges regulators face in overseeing tech giants' AI-related deals.
Dutch Regulator's Call for Enhanced Powers
The Dutch Authority for Consumers and Markets (ACM) has voiced its desire for expanded powers following the European Union's decision to drop its probe into Microsoft's takeover of Inflection AI 1. This move by the ACM underscores the growing challenges faced by regulatory bodies in effectively monitoring and controlling the rapidly evolving artificial intelligence (AI) sector, particularly when it involves tech giants like Microsoft.
Background of the Microsoft-Inflection Deal
Microsoft's acquisition of Inflection AI, a deal reportedly worth $650 million, has drawn significant attention from regulatory bodies 2. The deal involved Microsoft hiring dozens of Inflection's employees and licensing some of its technology. However, the European Commission concluded that the transaction did not meet the thresholds for review under the EU Merger Regulation, leading to the termination of its investigation 3.
ACM's Stance and Concerns
Martijn Snoep, the chairman of the ACM, expressed concern over the current regulatory framework's ability to address potential competition issues arising from such deals. He stated, "We see that more and more AI companies are being bought up by Big Tech firms. That could be a problem" 4. The ACM's primary worry is that these acquisitions could potentially stifle innovation and competition in the AI sector.
Proposed Changes to Regulatory Powers
The ACM is advocating for changes that would allow it to scrutinize deals based on their strategic importance rather than solely on traditional metrics like turnover. This approach aims to address the unique challenges posed by the AI industry, where the value of a company may not be accurately reflected by its current revenue 5.
Global Context and Implications
This development is part of a broader global trend where regulators are grappling with how to effectively oversee the rapidly growing AI sector. The ACM's call for expanded powers reflects a growing recognition that traditional regulatory frameworks may be insufficient to address the unique challenges posed by AI and big tech acquisitions. As AI continues to play an increasingly significant role in various industries, the outcome of such regulatory discussions could have far-reaching implications for innovation, competition, and market dynamics in the tech sector.
Reference
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[2]
U.S. News & World Report
|Dutch Competition Regulator Wants More Power After EU Drops Probe of Microsoft's Inflection Takeover[3]
[4]
EU Antitrust Regulators Won't Scrutinize Microsoft's Hiring of Inflection AI Staff
The European Union's antitrust regulators have decided not to investigate Microsoft's recent hiring of staff from artificial intelligence startup Inflection. This decision comes amid growing scrutiny of Big Tech's AI investments and acquisitions.
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UK Launches Probe into Microsoft's Hiring of Inflection AI Staff
The UK's Competition and Markets Authority (CMA) has initiated an investigation into Microsoft's recent hiring of Inflection AI's founder and key staff members. This move raises concerns about potential anti-competitive practices in the rapidly evolving AI industry.
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Microsoft Cleared of Antitrust Concerns in Inflection AI Partnership by UK Regulator
The UK's Competition and Markets Authority (CMA) has decided not to investigate Microsoft's acquisition of certain assets from Inflection AI, including the hiring of key employees. This decision comes after a review of the partnership between the two companies.
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German Antitrust Watchdog Intensifies Scrutiny on Microsoft's Market Dominance and AI Integration
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4 Sources
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UK Competition Watchdog Clears Microsoft's $13 Billion OpenAI Partnership
The UK's Competition and Markets Authority (CMA) has concluded its investigation into Microsoft's partnership with OpenAI, determining that the $13 billion investment does not qualify for a full merger investigation despite Microsoft's significant influence over the AI company.
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