Microsoft faces fresh antitrust scrutiny from US regulator

FTC investigation focused on several key areas including cloud computing, software licensing, cybersecurity and AI

Microsoft is again under the microscope of US antitrust regulators over potential antitrust violations related to its cloud computing and AI businesses.

As reported by Bloomberg, the US Federal Trade Commission (FTC) has launched a comprehensive investigation into the tech giant's business practices, including its cloud computing, software licensing, cybersecurity, and AI offerings.

The agency is said to have issued a detailed request for information from the company, spanning hundreds of pages.

Microsoft representatives are expected to meet with FTC officials next week.

The FTC's investigation is focused on several key areas. The agency is examining Microsoft's dominant position in the cloud computing market, particularly its Azure platform. The investigation includes claims that Microsoft's cloud practices make it difficult and costly for customers to move data from Azure to competing providers.

These concerns echo findings from an FTC consultation last year, which highlighted issues such as software licensing restrictions and high data transfer (egress) fees. Critics argue that these practices limit competition and harm consumers.

Beyond the cloud, Microsoft's AI investments are also under scrutiny. The company has invested nearly $14 billion in OpenAI, the creator of ChatGPT, as part of its aggressive push into the AI market. The FTC may be concerned about potential anticompetitive practices, such as data exclusivity and algorithmic bias.

The recent surge in cybersecurity incidents involving Microsoft products, coupled with the company's significant government contracts, has also drawn the FTC's attention. The agency is investigating whether Microsoft's market power and potential security vulnerabilities pose risks to consumers and businesses.

The probe mirrors similar investigations into Microsoft's cloud practices in the UK and the EU.

The UK Competition and Markets Authority (CMA) is currently examining potential antitrust issues involving Microsoft and Amazon in the cloud market.

In the EU, a formal complaint regarding Microsoft's cloud bundling practices was resolved after the company signed a deal with the complainants in July.

The FTC investigation comes more than two decades after Microsoft faced a landmark antitrust case brought by the US government. In the late 1990s, Microsoft narrowly avoided being broken up after being accused of monopolistic practices involving its Windows operating system.

The FTC is currently preparing for potential leadership changes under the administration of President-elect Donald Trump, who is set to return to office in January 2025. While Trump has yet to announce his nominee for FTC chair, he is expected to appoint a commissioner with a less aggressive approach towards business regulation.

FTC's current head, Lina Khan is a firm advocate for aggressive regulation of Big Tech. The agency has blocked dozens of mergers under Lina Khan's leadership, though it has suffered significant losses in high-profile cases, including failed attempts to block Meta's purchase of virtual reality start-up Within Unlimited and its acquisitions of Instagram and WhatsApp.

Trump's re-election has also sparked uncertainty about how his administration will approach ongoing antitrust cases involving major tech companies like Apple and Amazon.

Meanwhile, Google is awaiting a federal judge's decision on whether to enforce the US government's recommendation to divest Chrome following a ruling that its search business constitutes a monopoly.