The U.S. Federal Trade Commission (FTC) has initiated a sweeping antitrust investigation into Microsoft Corp., focusing on a range of its business operations from cloud computing and software licensing to its cybersecurity offerings and artificial intelligence products. This investigation is part of the FTC’s broader scrutiny of big tech companies and their influence over key markets.
The investigation, which has been building over the past year, comes after extensive interviews with competitors and business partners. According to sources familiar with the matter, the FTC has now issued a comprehensive, hundreds-of-pages-long request for Microsoft to turn over detailed information about its practices. The request, which was approved by FTC Chair Lina Khan, is expected to shed light on Microsoft’s market influence and its competitive behavior across multiple sectors.
As part of the ongoing inquiry, FTC antitrust lawyers are scheduled to meet with Microsoft’s competitors next week to gather further insights into the company’s business conduct. The probe has gained momentum, particularly around Microsoft’s cloud computing services, amid rising concerns about its dominance and the role of cybersecurity in its operations. Microsoft, a major government contractor, provides cloud-based software and services to several U.S. agencies, including the Department of Defense, making it a key player in the nation’s cybersecurity infrastructure.
The investigation also delves into Microsoft’s bundling practices, specifically its tendency to package its popular office productivity software and security tools alongside its cloud offerings. This strategy has raised alarms among competitors who argue that it gives Microsoft an unfair advantage and stifles competition. Critics, including companies like Salesforce, Zoom, and others, have voiced concerns that Microsoft’s practice of bundling its Teams video conferencing software for free with its popular Office products has made it harder for rivals to compete.
Another significant aspect of the investigation is the scrutiny of Microsoft’s cybersecurity performance. A series of high-profile incidents involving Microsoft products have raised concerns about its ability to secure both consumer and enterprise data. One of the most notable incidents was the CrowdStrike crash earlier this year, which impacted millions of devices running Microsoft Windows systems. The failure highlighted the vulnerability of widely used software and the potential cascading effects on the global economy, an issue the FTC has emphasized in its investigation.
The FTC’s 2023 report on cloud computing underscored concerns about market concentration in the cloud sector and the risks posed by outages and service degradation. As one of the largest players in this market, Microsoft’s practices are now under intense examination.
This probe marks a new chapter in the FTC’s ongoing scrutiny of Microsoft, more than 25 years after the government’s unsuccessful attempt to break up the company over similar practices involving its bundling of the Windows operating system with Internet Explorer. Microsoft has long been a focal point in antitrust debates, with critics accusing the company of using its market power to stifle competition and suppress innovation.
As Chair Lina Khan prepares to step down, this investigation is likely to be one of her final moves in her tenure, which has been characterized by aggressive action against corporate consolidation. The outcome of the case could have far-reaching implications for tech regulation in the U.S., especially as the Biden administration continues its push for stricter oversight of big tech.
Read more: