The U.S. Federal Trade Commission (FTC) has launched a broad antitrust investigation into Microsoft (MSFT.O), focusing on its software licensing and cloud computing business, a source revealed on Wednesday.
This investigation was approved by FTC Chair Lina Khan, coinciding with her expected departure in January next year. Donald Trump's election as U.S. president and his potential appointment of a Republican who takes a more lenient stance on business makes the ultimate outcome of this investigation uncertain.
The FTC is reviewing whether Microsoft abused its market dominance in the productivity software sector, specifically by imposing punitive licensing terms that prevent customers from migrating data from its Azure cloud services to other competing platforms. Insiders confirmed this earlier this month.
Additionally, the FTC is investigating Microsoft's practices related to cybersecurity and artificial intelligence products.
Microsoft did not comment on Wednesday.
Competitors criticized Microsoft's practices, stating they make it difficult for customers to disengage from its Azure cloud platform. The FTC received similar complaints last year, investigating the cloud computing market.
NetChoice, a lobbying group representing online companies such as Amazon (AMZN.O) and Google (GOOGL.O), criticized Microsoft's licensing policies and its integration of AI tools into Office and Outlook.
"Given that Microsoft is the largest software company in the world, dominating in productivity software and operating system software, the scale and consequences of its licensing decisions are exceptionally significant," the group stated.
Google complained to the European Commission about Microsoft's practices in September, claiming that Microsoft forced customers to pay up to 400% in additional fees to continue running Windows Server on competitors' cloud computing platforms and provided later and more limited security updates.
The FTC has requested a large amount of detailed information from Microsoft, Bloomberg reported earlier.
The agency has claimed jurisdiction over competitive issues involving Microsoft and OpenAI and has begun reviewing Microsoft's $650 million deal with AI startup Inflection AI.
Microsoft seems to be an exception in recent actions by U.S. antitrust regulators against major tech companies suspected of anti-competitive behavior.
Facebook's parent company Meta Platforms (META.O), Apple (AAPL.O), and Amazon have been accused by the U.S. of illegally maintaining monopoly power.
Google faces two lawsuits, one of which ruled that Google illegally obstructed competition between online search engines.
Microsoft CEO Satya Nadella testified in Google's trial, stating that Google locked in content used for training artificial intelligence by signing exclusive agreements with publishers.
It is still unclear whether Trump will ease regulations on major tech companies, which he initiated investigations against during his first term. Incoming Vice President JD Vance had expressed concerns about these companies' public discourse power.
"The Trump administration was an active enforcer of antitrust laws," said attorney Andrew Barlow of Doyle Barlow & Mazard, noting that the administration had sued Google and Facebook.
"When there is a change in government, the relevant agencies do not necessarily stop ongoing investigations," he added, "a change in government may lead to a shift in enforcement priorities and a change in the scrutiny of certain types of behavior."
However, Microsoft has indeed benefited from Trump's policies in the past.
In 2019, the Pentagon awarded Microsoft a $10 billion cloud computing contract, which Amazon was widely believed to win. Amazon subsequently claimed that Trump exerted improper pressure on military officials, leading the contract to shift from Amazon's AWS division to Microsoft.
Article reposted from: Jinshi Data