FTC Reportedly Launches Antitrust Investigation into Microsoft’s Cloud, AI, and Cybersecurity Practices

The U.S. Federal Trade Commission has reportedly opened an antitrust investigation into various aspects of Microsoft Corp.’s business, including the company’s cloud computing, software licensing, cybersecurity and artificial intelligence offerings.

The investigation comes after the FTC reportedly prepared to launch an investigation into allegations that Microsoft earlier this month. It was claimed that the FTC was investigating allegations that Microsoft was abusing its market power by imposing punitive licensing terms to prevent customers from moving their data from Azure to other platforms.

The now official investigation goes further than just licensing terms for Azure and other cloud products. Reports suggest that in addition to concerns over Microsoft’s licensing terms, the FTC is also investigating Microsoft’s cybersecurity activities and AI products.

As part of the investigation, the FTC drafted a detailed request, several hundred pages long, to force Microsoft to provide information.

According to Bloomberg, the FTC’s scrutiny comes after a series of cybersecurity incidents involving Microsoft products. The company is a leading government contractor, providing billions of dollars in software and cloud services to U.S. government agencies, including the Department of Defense.

The request was also signed by soon-to-be former FTC Chair Lina Khan. Khan is expected to be replaced after the election of Donald Trump as the 47th president of the United States.

As noted when the FTC was first informed that it was considering an investigation, the change in administration is key here. Khan’s decision to sue Microsoft just ahead of the new government could be seen as nothing more than performative virtue signaling. The investigation may simply be closed after January 20, but that said, it is unclear what position the new Trump administration will take on antitrust issues.

Republicans have in the past publicly expressed concerns about big tech companies and their practices. On the other hand, the new administration could be more lenient toward big tech companies as part of its promise to reduce regulation and other barriers that it says stifle innovation and growth.

Regardless of the direction the investigation takes, it is clear which company was one of the main drivers in opening an investigation: it is Google LLC.

Google wrote to the FTC in June 2023accusing Microsoft of anti-competitive practices. In the letter, Google claims that Microsoft enforces software licensing restrictions that effectively force customers to use its Azure cloud computing services in order to save money.

The accusations included that Microsoft took advantage of the dominance of Windows Server and Office to pressure its customers to use Azure and used a “complex web” of licensing restrictions designed to prevent companies from diversifying their software suppliers. ‘business.

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