The UK’s Competition and Markets Authority (DMA) announced on Tuesday that it was launching an investigation into Microsoft’s hiring of Inflexion employees in its user AI group and the roughly $650 million it paid to license Inflexion’s technology.
Inflection co-founders Mustafa Suleiman and Karen Simonian joined Microsoft in March, along with several other colleagues. Suleiman was named executive vice president and CEO of the newly formed Microsoft AI, and Simonian was named chief scientist for the group.
The issue the UK DMA is focusing on is whether Microsoft’s moves constitute a “relevant merger situation” and, if so, whether such moves would substantially lessen competition in the UK.
The investigation will begin on July 17, and a decision on whether to proceed further will be announced on September 11.
“Regulators have a right to challenge practices that risk stifling innovation and competition,” said Phil Bruncard, senior adviser at the UK-based Information Technology Research Group. “But startups thrive on the creativity, vision and unique ideas of their founders.”
“Competition is essential to foster creativity and innovation, and startups should be encouraged to grow independently, allowing competition to develop naturally. This will ensure that investment is based on merit, rather than dominant players defining the rules of competition in a way that benefits them,” Bruncard explained.
British regulators are not the only ones questioning the activity. In June, the US Federal Trade Commission (FTC) launched an investigation to determine whether there were actually undisclosed acquisitions through key hires and licensing deals.
The European Union is also closely monitoring developments. Reuters reported in April that EU antitrust commissioner Margrethe Vestager was watching to see if other companies were emulating Microsoft’s strategy of transferring talent and technology instead of formal mergers. She also told Reuters that she could take action if she observed a trend of circumventing merger and competition rules.
editor@itworld.co.kr
Source: www.itworld.co.kr
