European Union: Closed Referral procedure by EU Member States concerning the acquisition of certain assets of Inflection by Microsoft

On 18 September 2024, the European Commission acknowledged the withdrawal of referral requests by seven Member States regarding the acquisition of certain assets of Inflection AI, Inc. by Microsoft Corporation under Article 22 of the EU Merger Regulation (EUMR). This decision followed the Court of Justice of the European Union's ruling on 3 September 2024 in the Illumina/GRAIL case, which clarified that Member States cannot refer a transaction to the Commission under Article 22 of the EUMR if they are not competent to review the transaction under their national merger control rules. Consequently, the Commission will not take any action on this matter. The transaction involved Microsoft acquiring key assets from Inflection, including intellectual property and staff, to enhance its AI and machine learning capabilities, notably in AI chatbots and generative AI foundation models. Despite not meeting the notification thresholds of the EUMR and not being notified in any Member State, the initial referral was considered by the Commission in July 2024. However, the procedure has now concluded with the withdrawal of the referral requests.