Google Faces Scrutiny Over AI Partnership with Character.AI Amid Antitrust Concerns
The U.S. Department of Justice (DOJ) is reportedly examining a recent agreement between Google and AI inception Character.AI to assess whether it was designed to avoid antitrust oversight. According to a Bloomberg Law report, the inquiry is in its original stages and is probing if the deal, although not technically a junction, effectively functions like one and was therefore structured to sidestep nonsupervisory examination.
Enterprises Over Deal Structure
In 2023, Google entered a licensing arrangement with Character.AI, granting it access to the company’s large language model (LLM) technology. While the agreement was described as non-exclusive, Google also brought on board Character. AI’s co-founders — Noam Shazeer and Daniel De Freitas, formerly with Google. This dual move has raised concerns that the company might seek to quietly acquire vital technology and expertise without officially purchasing the firm.
A Reuters report notes that the DOJ is investigating whether the nature of the deal was intentionally crafted to avoid regulatory approval processes while still enabling Google to consolidate power. Google has maintained that it holds no ownership stake in Character.AI and that the startup continues to operate independently.
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Ongoing Regulatory Challenges for Google
This development adds to Google’s existing legal troubles. The DOJ has previously filed two high-profile antitrust lawsuits against the company — one addressing its dominance in online search and another targeting its control over the digital advertising sector. In addition, the Federal Trade Commission (FTC) recently supported the DOJ’s demand for Google to share search data with competitors, further intensifying regulatory scrutiny.
A Trend Among Tech Giants
Google's actions appear to reflect a broader trend in the tech industry. In March 2024, Microsoft reached a $650 million agreement with Inflection AI, which included staff acquisitions and licensing of AI technology. Amazon followed suit with key hires from Adept AI. Both transactions also drew attention from regulators.
Although Google insists it operates transparently, its repeated use of “non-merger” agreements has sparked concerns over whether the company is maneuvering around antitrust regulations to stay ahead in the rapidly evolving AI landscape.
