The US Federal Trade Commission (FTC) has launched a comprehensive antitrust investigation into Microsoft, scrutinizing its software licensing and cloud computing businesses.
Sources say the probe, approved by FTC Chair Lina Khan, raises questions about Microsoft’s competitive practices in a rapidly evolving technology landscape.
Scope of the Investigation
The FTC is examining allegations the tech giant may be abusing its market dominance in productivity software to restrict competition.
Key areas of concern include:
- Cloud Computing Practices: Allegations suggest Microsoft imposes punitive licensing terms to prevent customers from migrating data from its Azure cloud service to rival platforms.
- Cybersecurity and AI Products: The investigation is also exploring Microsoft’s practices related to cybersecurity solutions and artificial intelligence tools.
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Industry Complaints
Microsoft’s competitors have raised concerns about:
- Licensing Policies: Critics claim Microsoft’s licensing terms lock customers into its ecosystem, stifling competition.
- Pricing and Security Updates: Google has accused Microsoft of charging a 400 percent mark-up to run Windows Server on competing cloud platforms and providing delayed security updates to non-Azure customers.
- Integration of AI Tools: Groups like NetChoice, representing Amazon, Google, and other tech companies, argue Microsoft’s integration of AI tools into its Office suite reinforces its dominant market position.
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Broader Antitrust Context
The FTC’s probe aligns with ongoing regulatory scrutiny of Big Tech.
Companies like Meta, Apple, and Amazon have faced accusations of monopolistic practices. However, Microsoft has largely avoided direct confrontation with US antitrust regulators until now.
Notable developments include:
- AI Competition: The FTC is also investigating Microsoft’s deals with AI startups, such as the $650 million agreement with Inflection AI.
- Industry Testimony: Microsoft CEO Satya Nadella recently testified against Google, alleging anticompetitive behavior in search engine markets.
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Political Implications
The investigation’s outcome remains uncertain as the US transitions to a new administration.
President-elect Donald Trump is expected to appoint a Republican FTC chair, potentially shifting enforcement priorities.
However, legal experts suggest ongoing probes may continue irrespective of political changes.
Microsoft has previously benefited from Trump-era policies, including securing a controversial $10 billion Pentagon cloud computing contract over Amazon in 2019.
Looking Ahead
As the FTC demands detailed information about Microsoft’s practices, the investigation underscores the growing regulatory focus on the intersection of cloud computing, artificial intelligence, and market competition.
The findings could have significant implications for Microsoft and the broader tech industry, shaping how innovation and competition coexist in the digital economy.
