The U.S. Federal Trade Commission (FTC) has launched a comprehensive antitrust investigation into Microsoft, focusing on its software licensing practices and cloud computing services, according to a source familiar with the matter.
The probe, which was approved by FTC Chair Lina Khan ahead of her expected departure in January, comes at a time of political uncertainty. The election of Donald Trump as the next U.S. president raises questions about whether his administration will adopt a more lenient approach toward big businesses, leaving the future of the investigation unclear.
The FTC is investigating allegations that Microsoft may be abusing its dominant position in productivity software by imposing restrictive licensing terms. These terms are said to prevent customers from transferring their data from Microsoft’s Azure cloud service to competing platforms. Sources also revealed that the FTC is examining Microsoft’s practices concerning its cybersecurity and artificial intelligence (AI) products.
Competitors of Microsoft, including Amazon and Google, have raised concerns about the company’s licensing policies, which they argue lock customers into using its Azure cloud service. NetChoice, a lobbying group representing major online companies, criticized Microsoft for its integration of AI tools into products like Office and Outlook, warning that the company’s dominance in both productivity and operating systems software amplifies the impact of its licensing decisions.
In addition to the U.S. investigation, Google filed a complaint with the European Commission in September, alleging that Microsoft imposes a 400% markup on customers who want to run Windows Server on rival cloud services and provides them with delayed and limited security updates.
As part of its investigation, the FTC has requested a wide range of detailed information from Microsoft, according to reports. The agency has already initiated probes into Microsoft and OpenAI concerning competition within the AI sector and is scrutinizing Microsoft’s $650-million deal with the AI startup Inflection AI.
Microsoft has largely avoided scrutiny from U.S. antitrust regulators in recent years, even as competitors like Facebook owner Meta Platforms, Apple, Amazon, and Google have faced allegations of maintaining monopolistic practices. Google is currently fighting two lawsuits, one of which accuses the company of unfairly limiting competition among online search engines.
In a related development, Microsoft CEO Satya Nadella testified at Google’s trial, accusing the search giant of using exclusive agreements with publishers to control the content necessary for training AI models.
The fate of this investigation may depend on the direction of the incoming Trump administration, which could potentially ease regulations on Big Tech companies. However, experts note that even if the administration changes, ongoing investigations are unlikely to be abandoned, though enforcement priorities may shift.
Microsoft has benefited from past Trump administration policies, most notably when the Pentagon awarded the company a $10-billion cloud computing contract in 2019, a deal that had been widely expected to go to Amazon. Amazon later accused Trump of exerting undue pressure on military officials to steer the contract away from Amazon Web Services.
