Acqui-Hire: The Microsoft/­Inflection Case And Its Implications For Legal Practice And Legislation

On 29 November 2024, the German Federal Cartel Office published the results of its merger control review of Microsoft Corporation's ("Microsoft") hiring of almost all of Inflection AI, Inc.'s ("Inflection") employees ("Microsoft/InflectionTransaction"). The review revealed that the Microsoft/Inflection Transaction was in principle covered by the German merger control regime. However, the transaction was ultimately held not to be notifiable because Inflection was not engaging in substantial activities within Germany at the time of acquisition. This case illustrates the increasing importance of new types of transactions in the digital sector, particularly "acqui-hire transactions", i.e. transactions primarily aimed at acquiring qualified personnel. The German Federal Cartel Office's position is notable and has inspired its president,Andreas Mundt, to consider extensive reforms.