Industry body hits out at CMA following launch of Google, Anthropic merger probe

The UK’s Competition and Markets Authority (CMA) has launched an inquiry into Alphabet’s $2 billion Anthropic investment, prompting criticism from the Computer & Communications Industry Association (CCIA).

Investment from Google’s parent company was revealed last year, though the CMA only announced it would be probing the deal at the end of July 2024. The CMA is investigating whether the deal constitutes an effective merger between the two firms.

If the CMA finds that the investment equates to a merger, then the regulatory body will investigate whether this may harm competition within UK markets.

When the CMA first revealed its intentions to investigate, the body released an ‘invitation to comment’ from any interested parties.

The CCIA has taken issue with the CMA’s probe, with CCIA senior UK director Matthew Sinclair arguing that the move will have a damaging effect on the UK’s ability to innovate in the AI space.

"Another investigation by the competition regulator will create fresh uncertainty for a business that remains a challenger in a dynamic AI sector,” Sinclair said.

“Premature competition interventions will make it harder for new AI businesses to collaborate, innovate, and grow," he added.

This isn’t the CMA’s first move against firms operating in the AI space, nor is it the first to put AI startup Anthropic in the crosshairs.

In August 2024, the CMA announced a probe into Amazon’s $4 billion investment in the AI startup, again to establish whether or not the deal constitutes a merger.

As of September 2024, however, the CMA decided that Amazon’s partnership with Anthropic did not qualify for investigation after assessment as the deal failed to meet certain CMA requirements for investigation.

The CMA targets big tech 

The UK’s competition watchdog has been aggressive in its approach to big tech mergers in recent months as the generative AI boom gives rise to hefty investments.

Microsoft’s investment in OpenAI, for example, has been the subject of intense scrutiny by regulators in Europe as well as by the CMA. The US Federal Trade Commission (FTC) also announced an investigation into this deal.

Elsewhere, the CMA has reviewed competition in the UK cloud market, shining the spotlight on issues surrounding software licensing and egress fees.

That’s not to say the CMA is always metering out reprimands, though. The organization cleared Microsoft’s Inflection AI investment based on it not meeting certain thresholds.

Similarly, its probe into the tech giant’s investment in French AI startup, Mistral, was scrapped after the regulator found it did not constitute a merger.