FTC Opens Broad Antitrust Investigation into Microsoft’s Licensing and Cloud Practices

The U.S. Federal Trade Commission (FTC) has opened a broad antitrust investigation into Microsoft, including of its software licensing and cloud computing businesses, as per report. Microsoft is set to go under antitrust probe of U.S. FTC, which is launching a sweep into the tech giant’s practices. In a letter by FTC to Microsoft, the antitrust watchdog demanded that it hand over information to assist in the agency’s investigation.

(Image Credit: microsoft)

The probe was approved by FTC Chair Lina Khan ahead of her likely departure in January. The expectations that the elected president shall appoint a fellow Republican with a softer approach toward business, leaves the outcome of the investigation up in the air.

Microsoft antitrust investigation

The FTC is examining allegations that Microsoft is potentially abusing its market power in productivity software by imposing punitive licensing. This license prevent customers from moving their data from its Azure cloud service to other competitive platforms, as per sources.

The FTC is also looking at practices related to cybersecurity and artificial intelligence products, the source said on Wednesday.

Microsoft declined to comment on Wednesday.

Microsoft misuse licensing policies

Microsoft’s competitors have criticized its practices that keep customers locked into its cloud offering, Azure. The FTC had been receiving such complaints since last year as it examined the cloud computing market.

NetChoice, a lobbying group that represents online companies including Amazon and Google, criticized Microsoft’s licensing policies, and its integration of AI tools into its Office and Outlook.

“Given that Microsoft is the world’s largest software company, dominating in productivity and operating systems software, the scale and consequences of its licensing decisions are extraordinary,” the group said.

Google’s allegation

Google in September complained to the European Commission about Microsoft’s practices, saying it made customers pay a 400% mark-up to keep running Windows Server on rival cloud computing operators, and gave them later and more limited security updates.

FTC probes Microsoft

The FTC has demanded a broad range of detailed information from Microsoft. The FTC had already claimed jurisdiction over probes into Microsoft and OpenAI regarding competition in artificial intelligence, and started looking into Microsoft’s $650 million deal with AI startup Inflection AI.

Microsoft has been somewhat of an exception to U.S. antitrust regulators’ recent campaign against allegedly anticompetitive practices at Big Tech companies.

Big tech companies facing FTC probe

Facebook owner Meta Platforms, Apple, and Amazon.com Inc. have all been accused by the U.S. of unlawfully maintaining monopolies.

Alphabet’s Google is facing two lawsuits, including one where a judge found it unlawfully thwarted competition among online search engines. Microsoft CEO Satya Nadella testified at Google’s trial, saying the search giant was using exclusive deals with publishers to lock up content used to train artificial intelligence.

Microsoft’s EU antitrust investigation:

Microsoft’s business is wide-ranging. It has quickly become a leading player in the emerging artificial intelligence space, especially with an investment in OpenAI and its own AI system, Copilot, which built on the company’s existing cloud computing, enterprise software, gaming and device businesses.

And the company has faced antitrust concerns before. European officials earlier this year considered a formal investigation of Microsoft’s OpenAI partnership, part of a wider effort to assess competition in the AI field, although the probe never materialized.

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