EU’s Vestager may act if Microsoft’s poaching of Inflection staff signals wider trend

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BRUSSELS (Reuters) – EU regulators have noted Microsoft (NASDAQ:MSFT)’s hiring of most of artificial intelligence startup Inflection’s staff including its co-founders and may act if other companies act similarly, making it a trend, EU antitrust chief Margrethe Vestager said on Wednesday.

Microsoft last month hired co-founders Mustafa Suleyman and Karen Simonyan and most of Inflection’s 70-strong team for a newly created unit called Microsoft AI, as the U.S. software giant consolidates and expands its AI offerings for consumer products.

The move triggered criticism from rivals as the talent and technology transfer meant Microsoft avoided the regulatory scrutiny that comes with a traditional acquisition.

Vestager said she was following developments.

“It is the kind of thing on which we keep an eye but as you say, since it is not a merger it is not caught by merger rules,” she told reporters.

“We might (look into it) but we have no decisions, neither to do something or not do something. We have registered that this is happening and also registering that it’s happening in a way so that it escapes our scrutiny from our usual boxes,” she said.

Microsoft declined to comment.

There could be concerns if other companies follow suit, Vestager added.

“Of course if things become a trend and if that trend seems to be something that circumvents what has been put in place to preserve competition, which is merger rules, of course that could be restored and eventually corrected,” Vestager said.