The UK Competition and Markets Authority (CMA) has announced that it will not investigate the partnership between Google’s parent company, Alphabet, and artificial intelligence (AI) startup Anthropic. This decision follows a review that found the deal did not meet the criteria for a merger under UK competition law.
The British antitrust watchdog initiated a formal investigation last month, scrutinising the arrangement after concerns were raised about potential competition issues. The CMA had been examining whether the partnership could harm competition within the UK market. However, after conducting its assessment, the authority concluded that no relevant merger situation was created by the partnership.
The deal, which sees Alphabet acquiring certain rights over Anthropic’s business, includes a series of investments and non-exclusive agreements between the two companies. Google’s role in the partnership involves providing Anthropic with computing resources, including through its Google Cloud platform, as well as distributing Anthropic’s AI models via its Vertex AI service.
Additionally, Google has extended convertible debt financing to Anthropic and made acquisitions of non-voting shares. The agreement also grants Google consultation rights, allowing the company to advise on key business decisions. Despite the significance of the collaboration, the CMA did not find that it resulted in Alphabet gaining “material influence” over Anthropic.
The CMA’s investigation focused on whether Google’s commercial relationship with Anthropic had reached a level that would cause the two firms to no longer be distinct entities, a critical factor in determining if a merger had occurred.
While the CMA reviewed various aspects of the deal, including the influence Google could exert over Anthropic, it concluded that Alphabet did not acquire sufficient control to meet the threshold for a merger. Furthermore, the CMA found that the turnover of Anthropic in the UK did not exceed the required £70m, which ruled out the possibility of a merger based on turnover criteria.
CMA’s scrutiny of AI partnerships
The decision marks a significant development in the ongoing scrutiny of AI partnerships by regulators, particularly following the rapid growth of AI technologies such as OpenAI’s ChatGPT, which has raised concerns among regulators about the potential for anti-competitive practices in the fast-developing sector.
The CMA has been actively investigating collaborations between tech giants and AI startups to determine whether these agreements could stifle competition or harm consumers. In recent months, the watchdog has launched several investigations into such partnerships, including those involving Amazon, Microsoft, and Google with companies like Anthropic and Inflection AI.
However, the CMA’s efforts have not always led to action. Recently, it dropped its probe into Microsoft’s investment in the AI company Mistral, concluding that the deal did not meet the criteria for regulatory intervention. Similarly, the CMA cleared Amazon’s $4bn investment in Anthropic in September, also determining that the arrangement did not qualify as a merger situation under UK competition law.
Read more: CMA ends probe into $4bn partnership between Amazon and Anthropic
