EU will not investigate Microsoft-Inflection merger amid court decision
A recent court ruling has limited the European Commission’s ability to review mergers below the revenue threshold, leading to the dismissal of the Microsoft-Inflection case.
European antitrust regulators will not take action against Microsoft’s acquisition of staff from AI startup Inflection, including its co-founders, following the withdrawal of requests from seven European Union countries. These countries dropped their requests for the European Commission to investigate, due to a recent court ruling that limits the regulator’s ability to examine mergers below the EU’s revenue threshold.
The court ruling has been viewed by some as a correction against regulatory overreach. The European Commission, in response, stated it would not pursue the case further. Despite this, the Commission acknowledged the Microsoft-Inflection deal as a merger due to its restructuring of Inflection’s business focus towards AI development.
The agreement between Microsoft and Inflection represents a significant market shift. Under the EU’s merger rules, it is considered a concentration, reflecting the ongoing transformations in the AI industry.