- Microsoft seeks dismissal of lawsuit alleging Azure exclusivity inflated ChatGPT subscription prices
- Judge questions arbitration claims related to OpenAI deals and Microsoft legal arguments
- Subscribers say compute supply restrictions limit production and increase service costs
A group of ChatGPT Plus subscribers are facing retaliation in court after Microsoft asked a federal judge to dismiss their antitrust lawsuit, arguing that the allegations depend on speculation rather than direct evidence of harm.
The case (a PDF of the complaint can be downloaded here) focuses on allegations that cooperation between Microsoft and OpenAI led to higher prices and lower quality of service.
Microsoft told the court that the lawsuit should be dismissed because subscribers purchased services from OpenAI, not Microsoft itself. This separation, he argued, means that plaintiffs cannot demonstrate the type of direct harm required by antitrust law.
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In arbitration and not in federal court
If the judge rules the case should proceed, Microsoft said the dispute belongs in arbitration rather than in federal court. Its outside counsel, Julia Chapman, argued that users agreed to arbitration terms when they signed up for ChatGPT, and that those same terms should extend to claims closely related to the service.
“Equitable estoppel exists to prevent plaintiffs from doing just that,” Chapman said.
Plaintiffs’ attorneys disagreed, arguing that subscribers never agreed to resolve disputes with Microsoft through arbitration.
Their lawyer, Briane Dunne, told the court that extending arbitration protections to a company outside of the original agreement went beyond what the doctrine allows.
Judge P. Casey Pitts cast doubt on the arbitration argument during the hearing. He indicated there could be connections between the agreements, but questioned whether OpenAI’s terms should control claims brought against Microsoft.
“There may be some ‘overlap,'” Pitts said, “but I don’t understand why I’m going to have to think about the OpenAI deal.”
The dispute centers on claims that Microsoft required OpenAI to rely exclusively on its Azure systems to provide the computing resources needed to run ChatGPT.
The plaintiffs argue that reliance on a single supplier limited production and contributed to higher costs and slower service improvements.
Microsoft has rejected these claims, saying subscription prices are set solely by OpenAI and not Microsoft.
Its legal team also argued that the alleged deal was for cloud infrastructure services, while the plaintiffs alleged harm to the consumer AI market, creating a loophole that could weaken the antitrust case.
“This in itself is not an illegal horizontal agreement,” Cohen said. “It’s perfectly clear in the law.”
Judge Pitts has not indicated how he plans to rule, leaving the dismissal and arbitration requests unresolved for now.
Via MLex
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