FTC reportedly launches antitrust investigation into Microsoft’s cloud, AI and cybersecurity practices – News

The U.S. Federal Trade Commission has reportedly opened an antitrust investigation into various aspects of Microsoft Corp.’s business, including the company’s cloud computing, software licensing, cybersecurity and artificial intelligence offerings.

The investigation comes after FTC was reportedly preparing to launch an investigation into claims that Microsoft earlier this month. It was claimed that the FTC was investigating allegations that Microsoft was abusing its market power by imposing punitive licensing terms to prevent customers from moving their data from Azure to other platforms.

The now-official investigation is said to go further than licensing terms for Azure and other cloud products alone. Reports suggest that alongside concerns in relation to Microsoft’s licensing conditions, the FTC is also investigating Microsoft’s cybersecurity business and AI products.

As part of the investigation, the FTC has crafted a detailed request, reportedly hundreds of pages long, to force Microsoft to turn over information.

According to Bloomberg, the FTC’s scrutiny comes after a string of cybersecurity incidents that involved Microsoft products. The company is a top government contractor, providing billions of dollars in software and cloud services to U.S. government agencies, including the Defense Department.

The request was also signed off by the soon to be former FTC Chair Lina Khan. Khan is set to be replaced following the election of Donald Trump as the 47th president of the U.S.

As noted when the FTC was first reported to be considering an investigation, the change of Aadministration is key here. Khan’s decision to pursue Microsoft right ahead of the incoming new government could be argued to be nothing more than performative virtue signaling theater. The investigation runs the risk of simply being closed following Jan. 20, but that said, it’s not clear what position the incoming Trump administration will take on antitrust issues.

Republicans have, in the past, publicly expressed concerns about big tech companies and their practices. On the flip side, the incoming administration may go easier on big tech companies as part of a promise to decrease regulation and other hurdles that it says stifle innovation and growth.

Whichever direction the investigation goes, it’s known which company was a key driver behind the push for an investigation and that’s Google LLC.

Google wrote to the FTC in June 2023, accusing Microsoft of anticompetitive practices. In the letter, Google claimed that Microsoft employs software licensing restrictions that effectively force customers to use its Azure cloud computing services in order to save money.

The accusations included that Microsoft takes advantage of the dominant position of Windows Server and Office to pressure customers to use Azure and uses a “complex web” of licensing restrictions that are designed to prevent businesses from diversifying their enterprise software vendors.

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