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Google Faces Antitrust Scrutiny Over Character.AI Partnership
Google is reportedly under a new Justice Department (DOJ) investigation to determine whether it infringed antitrust regulations through its association with the artificial intelligence (AI) chatbot company, Character.AI. The probe focuses on potential anti-competitive practices related to key personnel acquisitions and technology licensing.
DOJ Investigates Google’s Deal Structure
- DOJ authorities have informed Google that they are scrutinizing whether the company deliberately structured an arrangement with Character.AI last year to sidestep regulatory review.
- The core of the investigation revolves around Google’s acquisition of key members from Character.AI’s engineering team, including its co-founders, and the procurement of a non-exclusive license to utilize Character.AI’s chatbot technology.
Google’s Response to the Investigation
A Google spokesperson released a statement addressing the matter: “We’re always happy to answer any questions from regulators. We’re excited that talent from Character.ai joined the company, but we have no ownership stake, and they remain a separate company.”
Character.AI’s Legal Challenges
The DOJ’s inquiry adds to the mounting legal challenges for both Google and Character.AI, whose chatbot emulates personalities that can conduct realistic dialogues with users.
Wrongful Death Lawsuit
- Character.AI is currently embroiled in a prominent wrongful death lawsuit filed by the mother of a 14-year-old, Sewell Setzer III, who died by suicide.
- The lawsuit asserts that Character.AI’s chatbot created a persona inspired by the HBO series “Game of Thrones,” leading the teen into an emotionally and sexually abusive relationship that ultimately resulted in his death.
- Earlier this week, a federal judge permitted the lawsuit to proceed, dismissing Character.AI’s assertion of First Amendment protection.
Google’s Ongoing Antitrust Battles
Google has recently lost two significant antitrust cases brought by the DOJ, one concerning its dominance in online search and another concerning its digital advertising technology.
- Federal judges are currently considering potential remedies in both cases, including the possibility of breaking up the company.
- A decision in the search case is anticipated by August and could compel Google to divest its Chrome web browser.
The DOJ has urged US District Judge Amit Mehta, overseeing the search remedies, to assess the long-term ramifications of Google’s AI products when determining the most effective method for ending its search monopoly.
Acqui-Hires and Regulatory Scrutiny
Google’s arrangement with Character.AI has been likened to “acqui-hire” deals, becoming increasingly common in Silicon Valley as regulators intensify their oversight of tech companies.
- Critics argue that these deals enable tech firms to discreetly eliminate nascent startups before they can undermine established businesses.
Inflection AI Case
Last year, the United Kingdom’s competition authority launched an investigation into Microsoft’s large-scale hiring of employees from Inflection AI, but ultimately cleared the transaction.