The U.S. Federal Trade Commission (FTC) has initiated a broad antitrust investigation into Microsoft, focusing on the company’s software licensing and cloud computing businesses. This investigation, approved by FTC Chair Lina Khan, comes as her tenure nears its end, with expectations that the Biden administration will soon be succeeded by a Republican president who may adopt a more lenient stance toward big businesses.
The FTC probe is examining potential abuses of market power by Microsoft in the productivity software sector, particularly in relation to its cloud services. The investigation is centered on allegations that Microsoft’s licensing practices are preventing customers from migrating data from its Azure cloud platform to competing services. In addition to this, the FTC is also investigating Microsoft’s cybersecurity and artificial intelligence (AI) products.
Microsoft has declined to comment on the investigation. However, competitors have long criticized the company for practices they believe lock customers into its cloud infrastructure. Last year, the FTC received several complaints about Microsoft’s licensing policies, particularly from cloud computing competitors such as Amazon and Google, who claim these practices stifle competition.
NetChoice, a lobbying group representing online companies including Amazon and Google, accused Microsoft of using its dominance in both software and operating systems to impose restrictive licensing terms. The group stated, “Given that Microsoft is the world’s largest software company, dominating productivity software and operating systems, the scale and consequences of its licensing decisions are extraordinary.”
In September, Google raised concerns with the European Commission, alleging that Microsoft imposed a 400% price markup on customers running Windows Server on rival cloud platforms and delayed or limited security updates. The FTC is reportedly seeking extensive information from Microsoft regarding its cloud practices and its potential impact on competition.
The FTC’s investigation into Microsoft comes at a time when U.S. antitrust regulators are increasingly scrutinizing Big Tech companies. Facebook owner Meta, Apple, and Amazon have all faced allegations of maintaining monopolies, while Alphabet’s Google is currently battling two lawsuits, including one accusing it of blocking competition in the online search engine market.
Microsoft, however, has largely escaped the scrutiny faced by other tech giants. In fact, the company has benefited from certain policies under the Trump administration. In 2019, Microsoft won a $10 billion cloud computing contract from the Pentagon, a deal that Amazon had expected to secure. Amazon later claimed that Trump influenced the decision to steer the contract away from its cloud service, Amazon Web Services.
As the U.S. political landscape shifts, it remains unclear how a potential Republican administration might approach antitrust enforcement against Big Tech, with some, like JD Vance, expressing concern about the power these companies hold over public discourse. Despite changes in leadership, legal experts suggest that ongoing investigations will likely continue, though enforcement priorities may shift.
