The U.S. Federal Trade Commission (FTC) has launched a broad antitrust investigation into Microsoft, focusing on its software licensing and cloud computing businesses, a source familiar with the matter revealed on Wednesday. FTC Chair Lina Khan approved the probe ahead of her anticipated departure in January. The election of Donald Trump as U.S. president, coupled with expectations that he will appoint a Republican successor with a softer stance toward business, has created uncertainty about the investigation’s outcome.
The FTC is investigating allegations that Microsoft has abused its dominance in productivity software by imposing restrictive licensing terms that discourage customers from transferring their data from its Azure cloud service to competing platforms. Earlier this month, sources confirmed the agency’s scrutiny of these practices. The investigation also includes Microsoft’s activities in cybersecurity and artificial intelligence (AI) products.
Microsoft declined to comment on the investigation. However, competitors have criticized its practices, claiming they lock customers into its Azure cloud offering. Last year, the FTC received complaints about Microsoft’s licensing policies while assessing the cloud computing market. NetChoice, a lobbying group representing companies like Amazon and Google that compete with Microsoft, denounced these policies and Microsoft’s integration of AI tools into its Office and Outlook products.
“Microsoft’s dominance in productivity and operating systems software amplifies the scale and consequences of its licensing decisions,” NetChoice said.
In September, Google filed a complaint with the European Commission, accusing Microsoft of charging a 400% markup for customers who run Windows Server on rival cloud platforms and delaying security updates for such customers.
The FTC has reportedly requested a wide range of detailed information from Microsoft, as Bloomberg reported earlier on Wednesday. The agency is also investigating competition issues related to Microsoft’s $650 million deal with AI startup Inflection AI and its collaborations with OpenAI.
Despite the FTC’s recent focus on antitrust actions against Big Tech, Microsoft has faced less regulatory scrutiny compared to other giants like Meta Platforms, Apple, Amazon, and Google. However, Alphabet’s Google is currently defending itself in two major lawsuits, including one alleging it unlawfully hindered competition in online search engines. Microsoft CEO Satya Nadella testified in Google’s trial, accusing the search giant of using exclusive deals with publishers to dominate AI training data access.
The Trump administration’s approach to Big Tech under its first term was aggressive, filing lawsuits against Google and Facebook. JD Vance, the incoming vice president, has also expressed concerns about Big Tech’s influence on public discourse. While changes in administration may shift enforcement priorities, ongoing investigations often persist. Lawyer Andre Barlow from Doyle Barlow & Mazard noted, “The Trump administration aggressively enforced antitrust laws, but administrations do not always drop ongoing investigations.”
Microsoft has previously benefited from Trump-era policies, including winning a $10 billion Pentagon cloud computing contract in 2019. Amazon later alleged that Trump improperly pressured officials to favor Microsoft over its Amazon Web Services unit.
