The US Federal Trade Commission (FTC) has opened a broad antitrust investigation into Microsoft Corp, including its software licensing and cloud computing businesses, a source familiar with the matter said on Wednesday.
The probe was approved by FTC Chair Lina Khan ahead of her likely departure in January.
The re-election of US president-elect Donald Trump, and the expectation he would appoint a fellow Republican with a softer approach toward business, leaves the outcome of the investigation up in the air.
Photo: Reuters
The FTC is examining allegations the software giant is potentially abusing its market power in productivity software by imposing punitive licensing terms to prevent customers from moving their data from its Azure cloud service to other competitive platforms, sources said earlier this month.
The FTC is also looking at practices related to cybersecurity and artificial intelligence (AI) products, the source said on Wednesday.
Microsoft declined to comment.
Competitors have criticized Microsoft’s practices they say keep customers locked into its cloud offering, Azure. The FTC fielded such complaints last year as it examined the cloud computing market.
NetChoice, a lobbying group that represents online companies such as Amazon.com Inc and Google, criticized Microsoft’s licensing policies and its integration of AI tools into its Office and Outlook.
“Given that Microsoft is the world’s largest software company, dominating in productivity and operating systems software, the scale and consequences of its licensing decisions are extraordinary,” the group said.
Google in September complained to the European Commission about Microsoft’s practices, saying it made customers pay a 400 percent mark-up to keep running Windows Server on rival cloud computing operators, and gave them later and more limited security updates.
The FTC has demanded a broad range of detailed information from Microsoft, Bloomberg News reported earlier on Wednesday.
The agency had already claimed jurisdiction over probes into Microsoft and OpenAI regarding competition in AI, and started looking into Microsoft’s US$650 million deal with AI start-up Inflection AI.
It is unclear whether Trump would ease up on big tech companies, whose first administration launched several probes into them.
J.D. Vance, the incoming US vice president, has expressed concern about the power the companies wield over public discourse.
Still, Microsoft has benefited from Trump’s policies in the past.
In 2019, the Pentagon awarded it a US$10 billion cloud computing contract that Amazon had widely been expected to win.
Amazon later alleged that Trump exerted improper pressure on military officials to steer the contract away from its Amazon Web Services unit.
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