The US Federal Trade Commission (FTC) has initiated a wide-ranging antitrust investigation into Microsoft, scrutinising the company’s software licensing and cloud computing businesses, according to a source familiar with the matter. The probe, approved by FTC Chair Lina Khan, comes ahead of her anticipated departure in January. The potential return of Donald Trump to the presidency raises uncertainty about the investigation’s outcome, given expectations that his administration may adopt a more business-friendly approach.
The FTC is reportedly examining whether Microsoft is abusing its market dominance in productivity software by enforcing restrictive licensing terms that deter customers from migrating data from its Azure cloud platform to competitors. Additionally, the investigation includes a review of Microsoft’s practices in cybersecurity and artificial intelligence products, the source confirmed.
Microsoft declined to comment on the investigation. However, complaints from competitors about Microsoft’s business practices have gained traction. Critics allege the tech giant’s policies effectively lock customers into its Azure platform. Last year, the FTC fielded similar complaints while reviewing the cloud computing sector.
Lobbying group NetChoice, which represents companies like Amazon and Google that compete with Microsoft in the cloud market, has been vocal in its criticism. The group highlighted Microsoft’s licensing strategies and its integration of artificial intelligence tools into products like Office and Outlook. “Given that Microsoft is the world’s largest software company, dominating productivity and operating systems software, the scale and consequences of its licensing decisions are extraordinary,” said NetChoice.
Google has also raised concerns about Microsoft’s practices, filing a complaint with the European Commission in September. The search giant accused Microsoft of charging customers a 400% markup to run Windows Server on rival cloud platforms and delaying critical security updates for non-Microsoft services.
The FTC has reportedly demanded extensive documentation from Microsoft, following up on earlier complaints. The agency has already claimed jurisdiction over investigations involving Microsoft and OpenAI related to competition in artificial intelligence. This includes an inquiry into Microsoft’s $650 million investment in AI startup Inflection AI.
While the FTC has ramped up enforcement actions against other major tech firms like Meta, Apple, Amazon, and Alphabet’s Google, Microsoft has largely avoided the same level of scrutiny. However, its business practices have come under increasing examination as competitors and regulators focus on its dominance in critical sectors like cloud computing and AI.
Microsoft’s CEO, Satya Nadella, recently testified in Google’s antitrust trial, accusing the company of using exclusive agreements to limit access to content for AI training. These remarks highlight the growing tensions within the tech industry over market power and anticompetitive practices.
The investigation’s trajectory could shift depending on political changes. Trump’s first administration launched several antitrust probes into Big Tech, including lawsuits against Google and Meta. However, Trump has historically demonstrated mixed enforcement priorities, with his administration awarding Microsoft a controversial $10 billion Pentagon cloud contract in 2019, which Amazon alleged was influenced by political interference.
Legal experts note that changes in administration do not necessarily halt ongoing investigations. “While shifts in enforcement priorities occur, agencies often continue existing probes,” said Andre Barlow, an antitrust attorney.