Big Tech’s acquihire deals face regulatory scrutiny, outgoing EU antitrust official says

Olivier Guersent, the retiring director general of the EU’s competition unit, said that these deals, where tech giants hire most of a startup’s key staff rather than buying the company outright, are viewed as a deliberate attempt to sidestep merger regulations.

“It is important to preserve effective competition,” Guersent told Reuters in an interview ahead of his retirement after a 33-year career. He argued that acquihires can be considered a merger because a company’s staff are among its most critical assets.

The EU’s strategy will rely on empowering national competition agencies. Guersent said the Commission is actively encouraging member states with “call-in powers”—which allow them to refer deals that fall below the EU’s financial threshold for review—to use them.

“We need to be patient and have enough member states that have call-in provisions and use them. But we are working on it,” he said, highlighting the cooperative effort within the European Competition Network (ECN).

This new focus puts several recent high-profile deals under a microscope. Last year, Microsoft’s $650 million deal to hire most of the staff from AI startup Inflection, including its co-founders, drew significant attention. Other examples include Google’s poaching of employees from chatbot startup Character.AI and AI code generator Windsurf, as well as Amazon and Meta making similar moves to absorb key talent from AI firms.

Guersent, who was a key architect of the EU’s landmark Digital Markets Act (DMA), acknowledged that reining in Big Tech is an ongoing battle. While he said the DMA “made a difference in fields in which decades of antitrust enforcement have not managed to make a difference,” he conceded the results have been relative, contrasting Apple’s compliance with Meta’s pushback.

Should You Invest $1,000 in MSFT Right Now?

This looming regulatory threat in Europe adds another layer of complexity for investors considering Microsoft stock. The decision to invest requires balancing the company’s immense strengths against a growing and determined regulatory environment. The following points are for informational purposes and should not be considered financial advice.

• The Bull Case: An investment in Microsoft is a bet on its continued dominance in software, cloud computing (Azure), and its clear leadership in the artificial intelligence race. The company has successfully integrated AI across its product suite with its Copilot services, creating new, high-margin revenue streams. Its partnership with OpenAI and its own internal talent give it a formidable moat that competitors are struggling to cross. From this perspective, regulatory headwinds in one region, while a nuisance, are unlikely to derail the global momentum of a company with such deep technological and financial resources.

• The Bear Case: The EU’s focus on acquihires directly targets Microsoft’s core AI strategy. The $650 million Inflection deal is a prime example of the exact practice the EU wants to scrutinize. If regulators successfully block or unwind such deals in the future, it could slow Microsoft’s ability to quickly acquire top-tier talent, potentially hindering its innovation pipeline. This adds to the broader regulatory risk facing all Big Tech firms, which could lead to fines, forced changes in business practices, and prolonged, costly legal battles. This specific threat shows that regulators are adapting and closing loopholes, increasing the long-term uncertainty for a key part of Microsoft’s growth story.

Ultimately, an investor must weigh whether Microsoft’s commanding lead in the AI revolution and its fundamental business strength are enough to overcome the clear and escalating regulatory risks in major markets like Europe.