The US Federal Trade Commission (FTC) has initiated a comprehensive antitrust investigation into Microsoft Corp., examining a range of its business operations. Notably, the probe encompasses Microsoft’s cloud computing, software licensing, cybersecurity, and artificial intelligence offerings, shedding light on how these elements contribute to its market influence.
This investigation arrives after over a year of informal interviews with competitors and business partners. Antitrust regulators have constructed an extensive, detailed information request for Microsoft, which includes hundreds of pages. This request follows the approval of FTC Chair Lina Khan, marking it as one of her final actions before stepping down, as reported by multiple individuals privy to the situation.
The FTC’s focus on Microsoft’s cloud computing sector intensified after cybersecurity breaches linked to the company’s products. As a leading government contractor, Microsoft’s involvement in providing software and cloud services to entities such as the Defense Department magnifies the significance of these concerns. Indeed, antitrust lawyers are scheduled to meet with Microsoft’s competitors in the upcoming days to gather further insights into their business practices.
This inquiry marks a renewed investigation into Microsoft’s operations, echoing past scrutiny by the US government more than 25 years ago. The current probe pays particular attention to Microsoft’s practice of bundling both its office productivity software and security solutions with its cloud offerings. These tactics have sparked complaints from competitors who argue that the bundling is anticompetitive, hindering their ability to compete effectively within the market.
Part of the FTC’s investigation targets Microsoft Entra ID, previously known as Azure Active Directory, a crucial component in authenticating users accessing cloud-based software. Critics contend that such bundling strategies disadvantage rival firms in the authentication and cybersecurity sectors. Prominent critics like Slack and Zoom Communications Inc. assert that Microsoft’s offering of its Teams video-conferencing software for free limits competition, specifically impairing their market endeavors.
The outcome of this investigation — initiated under the leadership of Lina Khan — is uncertain as the baton passes to the incoming FTC chair, yet to be announced under the upcoming presidential administration. This regulatory scrutiny underscores the ongoing dialogue surrounding technology giants’ influence in critical sectors and the implications for competition. For additional information, the original article is available here.