More 'problems' for Google as company may be facing probe over another 'business deal'

Google may have another problem in the US as the Justice Department is reportedly investigating whether the tech giant violated antitrust laws through its agreement with chatbot developer Character.AI. Citing sources familiar with the matter, Bloomberg Law reported that regulators are examining whether the arrangement was structured in a way that allowed Google to avoid formal government review typically required for mergers or acquisitions.

The scrutiny centers on a 2023 deal in which Character.AI’s founders joined Google, while the company received a non-exclusive license to use the startup’s artificial intelligence technology. This AI company is known for chatbots that can mimic anyone or anything.

Why Google-Character.AI deal is under lens
Though deals like this are common in the tech industry and often seen as a way to acquire expertise without formal acquisition, regulators are increasingly wary. Authorities are concerned that large tech firms may be using such agreements to reduce competition from emerging startups without triggering regulatory oversight.

What Google has to say
A Google spokesperson, Peter Schottenfels, said in a statement that the company is cooperating with regulators.

“We’re excited that talent from Character.AI has joined the company, but we have no ownership stake and they remain a separate company,” he was quoted as saying.

While the Justice Department has not accused Google of any wrongdoing, it retains the authority to investigate whether the deal is anticompetitive, even if it didn’t require formal merger review, the report said.

Previously, the DOJ has criticised Google's AI business deal with Samsung as well as Search deal with Apple under which the Alphabet-owned company paid the iPhone maker billions to make Google Search as default search engine on Safari.