Investing.com -- Alphabet (NASDAQ: GOOGL )’s Google is under investigation by the U.S. Justice Department over potential antitrust law violations, according to a report from Bloomberg, citing people familiar with the matter. The probe centers on Google’s agreement with AI startup Character.AI, which allows Google to use the startup’s technology.

Antitrust officials are examining whether Google structured the agreement to evade formal government merger scrutiny. In the deal made last year, Character.AI’s founders joined Google, and Google obtained a non-exclusive license to use the startup’s technology. These types of agreements are common in Silicon Valley as a way for companies to secure expertise for new projects.

Regulators, however, have become attentive to these arrangements, concerned that established tech companies may use their influence to stifle competition from innovative newcomers.

Google’s spokesperson, Peter Schottenfels, stated in an email that Google is "always happy to answer any questions from regulators." He added that while Character.AI’s talent has joined Google, Google has no ownership stake in Character.AI, which remains a separate company.

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