The U.K. Competition and Markets Authority is launching a preliminary investigation into whether the partnership will impact competition.
The U.K. government has launched a preliminary investigation into the partnership between Amazon and Anthropic to see if it will significantly lessen competition. This comes days after a similar probe was announced into Alphabet’s collaboration with the AI startup.
In March, Amazon concluded its $4 billion investment in Anthropic, the company behind the Claude LLM family, some of the only viable competitors to OpenAI’s ChatGPT and Google’s Gemini. It was founded by former OpenAI employees, including siblings Daniela and Dario Amodei, who were both execs.
The Competition and Markets Authority believes that this partnership could result in a substantial lessening of competition within the U.K. tech markets. It will now take until Oct. 4 to make its so-called Phase 1 decision on whether the merger warrants a full Phase 2 investigation or whether it is cleared of competition-related concerns.
If the CMA discovers cause for concern that may lead to a Phase 2 referral, Amazon will be given the opportunity to offer undertakings to try to resolve (them).
An Anthropic spokesperson told TechRepublic in an emailed statement, We are an independent company. Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others.
An Amazon spokesperson told TechRepublic in an emailed statement, We’re disappointed that the UK’s Competition and Markets Authority (CMA) has not ended its probe yet.
The government authority has another open Phase 1 inquiry into whether Microsoft’s hiring of Inflection AI co-founder Mustafa Suleyman and several coworkers should be considered anti-competitive. It is also looking into whether the connections between Microsoft and OpenAI open up the possibility of a merger, which could impact competition.
The Digital Markets, Competition, and Consumers Bill that was passed in May also anticipates new powers for the CMA. According to the April report, the CMA can enforce consumer protection law against infringing firms and apply non-compliance penalties of up to 10% of a firm’s worldwide turnover.
Big Tech firms are rapidly investing in young AI startups to gain early control and capitalise on the AI boom. Such collaborations can lead to market dominance, making it more difficult for other independent companies to compete with the advanced technology and reach of the big players.
The CMA is looking to identify relevant merger situation(s) that allow large tech companies to shield themselves from competition in the U.K.
In July, the CMA released a joint statement with the European Commission, U.S. Department of Justice, and U.S. Federal Trade Commission, where they committed to studying whether the AI industry allows for sufficient competition.
