EU Antitrust Regulators Won't Scrutinize Microsoft's Hiring of Inflection AI Staff

No merger scrutiny of Microsoft's hiring of Inflection staff, EU says

Microsoft's hiring of artificial intelligence startup Inflection's staff including its co-founders will not be scrutinised under European Union merger rules, EU antitrust regulators said on Wednesday. The European Commission said seven EU countries had dropped their requests asking it to examine the deal. The move followed a ruling from Europe's top court earlier this month prohibiting the EU enforcer from examining merger cases which fall below the EU's merger revenue threshold. Judges said the EU antitrust watchdog was also not allowed to encourage its national peers to ask it to take up such cases. Critics said these merger powers were regulatory over-reach while the Commission said such deals could be killer acquisitions in which big companies acquire startups to shut them down. Microsoft revamps reporting on business units, offers clarity on AI benefits "All seven member states that submitted an initial referral have decided to withdraw their requests. Therefore, the Commission will take no decision in this matter," the EU executive said. Still it said the deal amounted to a merger as it means the 'new Inflection' would shift its focus to a different activity, namely its AI studio business. "The Commission regards the agreements entered into between Microsoft and Inflection as a structural change in the market that amounts to a concentration as defined under Article 3 of the EUMR," it said, referring to the bloc's merger rules. Microsoft welcomed the announcement. "We continue to be confident that the hiring of talent promotes competition and should  not be treated as a merger," a Microsoft spokesperson said. The company hired in March co-founders Mustafa Suleyman and Karen Simonyan and most of Inflection's 70-strong team for a newly created unit called Microsoft AI to consolidate and expand its AI offerings for consumer products. (Reporting by Foo Yun Chee; Editing by Emelia Sithole-Matarise) Published - September 19, 2024 10:03 am IST Read Comments

No Merger Scrutiny of Microsoft's Hiring of Inflection Staff, EU Says

BRUSSELS (Reuters) -Microsoft's hiring of artificial intelligence startup Inflection's staff including its co-founders will not be scrutinised under European Union merger rules, EU antitrust regulators said on Wednesday. The European Commission said seven EU countries had dropped their requests asking it to examine the deal. The move followed a ruling from Europe's top court earlier this month prohibiting the EU enforcer from examining merger cases which fall below the EU's merger revenue threshold. Judges said the EU antitrust watchdog was also not allowed to encourage its national peers to ask it to take up such cases. Critics said these merger powers were regulatory over-reach while the Commission said such deals could be killer acquisitions in which big companies acquire startups to shut them down. "All seven member states that submitted an initial referral have decided to withdraw their requests. Therefore, the Commission will take no decision in this matter," the EU executive said. Still it said the deal amounted to a merger as it means the 'new Inflection' would shift its focus to a different activity, namely its AI studio business. "The Commission regards the agreements entered into between Microsoft and Inflection as a structural change in the market that amounts to a concentration as defined under Article 3 of the EUMR," it said, referring to the bloc's merger rules. Microsoft welcomed the announcement. "We continue to be confident that the hiring of talent promotes competition and should  not be treated as a merger," a Microsoft spokesperson said. The company hired in March co-founders Mustafa Suleyman and Karen Simonyan and most of Inflection's 70-strong team for a newly created unit called Microsoft AI to consolidate and expand its AI offerings for consumer products. (Reporting by Foo Yun Chee; Editing by Emelia Sithole-Matarise)

No merger scrutiny of Microsoft's hiring of Inflection staff, EU says

Judges said the EU antitrust watchdog was also not allowed to encourage its national peers to ask it to take up such cases. Critics said these merger powers were regulatory over-reach while the Commission said such deals could be killer acquisitions in which big companies acquire startups to shut them down. "All seven member states that submitted an initial referral have decided to withdraw their requests. Therefore, the Commission will take no decision in this matter," the EU executive said. Still it said the deal amounted to a merger as it means the 'new Inflection' would shift its focus to a different activity, namely its AI studio business. "The Commission regards the agreements entered into between Microsoft and Inflection as a structural change in the market that amounts to a concentration as defined under Article 3 of the EUMR," it said, referring to the bloc's merger rules. "We continue to be confident that the hiring of talent promotes competition and should  not be treated as a merger," a Microsoft spokesperson said. The company hired in March co-founders Mustafa Suleyman and Karen Simonyan and most of Inflection's 70-strong team for a newly created unit called Microsoft AI to consolidate and expand its AI offerings for consumer products. (Reporting by Foo Yun Chee; Editing by Emelia Sithole-Matarise)

EU antitrust regulators will not act on Microsoft's hiring of inflection staff

BRUSSELS, Sept 18 (Reuters) - EU antitrust regulators will not take action against Microsoft's (MSFT.O), opens new tab hiring of artificial intelligence startup Inflection's staff including its co-founders after seven EU countries dropped their requests asking their bigger peer to examine the deal, the European Commission said on Wednesday. The move by the seven national antitrust watchdogs followed a landmark court ruling earlier this month prohibiting the EU enforcer from examining merger cases which fall below the EU's merger revenue threshold. Advertisement · Scroll to continue Critics said such reviews were regulatory over-reach. "The Commission will take no decision in this matter," the EU executive said. Still it said the deal amounted to a merger as the deal means the 'new Inflection' would shift its focus to a different activity, namely its AI studio business. "The Commission regards the agreements entered into between Microsoft and Inflection as a structural change in the market that amounts to a concentration as defined under Article 3 of the EUMR," it said, referring to the bloc's merger rules. Reporting by Foo Yun Chee Our Standards: The Thomson Reuters Trust Principles., opens new tab

EU antitrust regulators will not act on Microsoft's hiring of inflection staff

BRUSSELS (Reuters) - EU antitrust regulators will not take action against Microsoft's hiring of artificial intelligence startup Inflection's staff including its co-founders after seven EU countries dropped their requests asking their bigger peer to examine the deal, the European Commission said on Wednesday. The move by the seven national antitrust watchdogs followed a landmark court ruling earlier this month prohibiting the EU enforcer from examining merger cases which fall below the EU's merger revenue threshold. Critics said such reviews were regulatory over-reach. "The Commission will take no decision in this matter," the EU executive said. Still it said the deal amounted to a merger as the deal means the 'new Inflection' would shift its focus to a different activity, namely its AI studio business. "The Commission regards the agreements entered into between Microsoft and Inflection as a structural change in the market that amounts to a concentration as defined under Article 3 of the EUMR," it said, referring to the bloc's merger rules.

Microsoft Spared EU Antitrust Probe Over Inflection AI Ties

European Union antitrust officials said a number of countries in the bloc had withdrawn requests for regulators to probe Microsoft's ties to Inflection AI, meaning the tech giant won't face a formal investigation over its partnership with the artificial-intelligence startup. Microsoft earlier this year hired Inflection AI's cofounder and almost all of its employees and agreed to pay the startup around $650 million as part of a licensing fee to resell its technology. Big tech firms have been splurging on AI startups to get their hands on what they see as promising AI features that they hope to cash in on further down the line. The European Commission, the EU's executive arm, said seven member states had pulled their initial referral requests after the European Court of Justice, the bloc's highest court, rebuked the commission for overreach in Illumina's takeover of Grail. The ECJ said two weeks ago that the legal tool that officials relied on to look at the case was used improperly. "We welcome that referrals of our hiring of Inflection AI employees to the European Commission were withdrawn," a Microsoft spokesperson said. "We continue to be confident that the hiring of talent promotes? competition and should? not be treated as a merger." Inflection AI didn't respond to a request for comment. The commission said it had taken note of the withdrawals. "Therefore, the commission will take no decision in this matter," it said. The announcement comes two weeks after U.K. antitrust officials said Microsoft's partnership with Inflection AI didn't pose a threat to competition and wouldn't open a formal investigation. The decisions offer Microsoft some breathing space as the tech giant faces more scrutiny on both sides of the Atlantic. British officials are still looking at whether Microsoft's partnership with ChatGPT maker OpenAI should be considered a de facto merger. Meanwhile, The Wall Street Journal reported in June that the Federal Trade Commission was investigating whether Microsoft structured its deal with Inflection AI in a manner to avoid a government antitrust review. News Corp, owner of Dow Jones Newswires and the Journal, has a content-licensing partnership with OpenAI.

Europe Scraps Antitrust Investigation Into Microsoft-Inflection AI Agreement

In March, Microsoft paid $650 million to Inflection AI as a fee to resell its technology and hired two of its co-founders. Microsoft (MSFT) won't face a formal European regulatory investigation over its partnership with artificial intelligence (AI) startup Inflection AI. The European Commission, the executive branch of the European Union (EU), announced that seven member nations have withdrawn their initial requests for an antitrust inquiry into the deal. The Commission said because of that, it will make no decision on the matter. Microsoft in March said that it paid Inflection AI $650 million as part of a licensing fee to resell its technology. In addition, CEO Satya Nadella said that the company had hired two of Inflection's co-founders, Mustafa Suleyman and Karen Simonyan, as well as other employees, to form a new division called Microsoft AI. Nadella said that Microsoft AI would focus on advancing its own AI product, CoPilot, and the firm's other consumer AI products and research. That move raised the concerns of antitrust regulators on both sides of the Atlantic. Earlier this month, the UK's Competition and Markets Authority ruled that the agreement was not a threat to competition there. However, U.S. officials are reportedly continuing to look into it. Microsoft did not immediately respond to Investopedia's request for comment. Microsoft's shares, down slightly today, are up about 15% in 2024.