The CMA first launched a probe earlier this year investigating whether the partnership has created a ‘relevant merger situation’.
The UK’s market watchdog has concluded that the partnership between Google parent company Alphabet and Anthropic, the start-up behind the AI chatbot Claude, does not qualify for an investigation.
The Competition and Markets Authority (CMA) in its decision announced today (19 November) said that Google did not have “material influence” over Anthropic as a result of the partnership, which the CMA concluded after a review of internal documents from the two parties.
The watchdog investigated ways through which Google can exercise control over Anthropic and concluded that the “available evidence” did not indicate that Google has the “ability” to do so.
Moreover, to qualify for a merger investigation, the business being taken over needs to either have an annual turnover in the UK of at least £70m or the combined businesses need to have at least a 25pc share in any market in the country.
However, through inquiry, the CMA found that Anthropic’s UK turnover does not exceed the minimum requirement of £70m.
“Our investigation has shown that Google has not acquired the ability to materially influence Anthropic’s commercial policy and therefore the partnership does not meet the jurisdictional threshold for UK merger control to apply,” said Joel Bamford, the executive director of the CMA.
“It’s through merger reviews that we can appropriately assess the nature and impact of complex partnerships such as the one between Google and Anthropic,” he said.
Google agreed to invest $2bn in Anthropic in October 2023, which included a $500m initial cash infusion and an additional $1.5bn over time.
Through the partnership, Google would acquire non-voting shares in Anthropic as well as enjoy a non-exclusive arrangement for the supply of compute capacity to Anthropic. While Anthropic, through a non-exclusive agreement, would distribute its Claude foundation models on Vertex AI – a Google-owned machine learning (ML) platform to train and deploy AI and ML models.
Moreover, Google will also take a consulting role, advising Anthropic on significant business issues.
The partnership piqued the CMA’s interest earlier this year, who launched the merger inquiry last month.
However, Josh Mesout, chief innovation officer of cloud service provider Civo, said: “While the CMA has decided not to pursue an investigation into the Anthropic-Alphabet partnership, the broader concerns raised in the investigation about potential market concentration in AI remain valid.
“Over-dependence on a handful of major firms could still stifle innovation, limit consumer choice, and potentially lead to a monopoly that favours Big Tech.”
Earlier this year, the CMA closed two investigations into the Google and Apple app stores, assessing their potential impact on competition in the UK.
However, as a provisional conclusion to another investigation, the markets watchdog found Google’s actions as a dominant player in adtech may be harming advertisers and publishers and may have broken competition law.
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