Microsoft Under FTC Antitrust Investigation Over Cloud, Software Licensing

Max Carter

Max Carter

November 27, 2024 · 3 min read
Microsoft Under FTC Antitrust Investigation Over Cloud, Software Licensing

Microsoft, the tech giant, is currently under investigation by the Federal Trade Commission (FTC) over antitrust concerns, making it the fifth Big Tech company to face such scrutiny in recent years. The agency is examining Microsoft's cloud and software licensing business, cybersecurity services, and AI offerings, according to a report by Bloomberg and confirmed by The Verge.

The investigation, which has been ongoing for over a year, involves a comprehensive review of Microsoft's practices, including its bundling of productivity and security software with its Azure cloud. The FTC's interest in Microsoft's cloud business was reportedly sparked by several security incidents impacting its products, particularly given the company's significant role as a top supplier of software to US government agencies.

The probe has involved informal discussions with Microsoft competitors and partners, as well as a demand for information that spans hundreds of pages. Despite the significance of the investigation, both the FTC and Microsoft have declined to comment. However, the government's Cyber Safety Review Board has previously concluded that "Microsoft's security culture was inadequate and requires an overhaul," citing the company's centrality in the technology ecosystem.

In response to the criticism, Microsoft CEO Satya Nadella issued a memo to employees emphasizing the importance of prioritizing security. The company's history with antitrust scrutiny dates back to the late 1990s, when it faced an anti-monopoly lawsuit from the Department of Justice over the bundling of its web browser and Windows operating system.

However, Microsoft has largely escaped the kind of antitrust scrutiny applied to its peers, including Amazon, Apple, Meta, and Google, each of which is fighting its own monopoly charges from the government. The FTC's investigation into Microsoft marks a significant shift in the agency's focus, and its outcome could have significant implications for the tech industry.

The investigation's future is uncertain, as the FTC's composition is set to change with the inauguration of President-elect Donald Trump in January. Trump is likely to appoint a new chair or commissioner to the agency who aligns with his viewpoints, which could impact the direction of the probe. While it's unclear what this could mean for the investigation, it's worth noting that Trump's administration has previously filed antitrust suits against Google and Meta.

As the tech industry continues to grapple with antitrust concerns, the outcome of the FTC's investigation into Microsoft will be closely watched. The agency's scrutiny of the company's cloud and software licensing business, cybersecurity services, and AI offerings could have far-reaching implications for the industry, and may signal a shift in the government's approach to regulating Big Tech.

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