Microsoft antitrust investigation: Software company faces accusations of abuse of power

(Reuters) – The U.S. Federal Trade Commission has launched a broad antitrust investigation into Microsoft Corp., including its software licensing and cloud computing businesses, a person familiar with the matter said on Wednesday.

FTC Chairwoman Lina Khan likely approved the investigation before she left her post in January. The election of Donald Trump as U.S. president and expectations that he will appoint a fellow Republican with a more conciliatory stance on business have left the findings hanging in the balance.

Earlier this month, sources confirmed that the FTC was investigating allegations that the software giant may have abused its power in the productivity software market by imposing punitive licensing terms to prevent customers from moving data from its Azure cloud service to competing platforms.

The FTC is also studying practices related to cybersecurity and artificial intelligence products, sources said Wednesday.

Microsoft declined to comment Wednesday.

Rivals have criticized Microsoft’s approach, saying it limits customers to its cloud offering, Azure. The Federal Trade Commission made such a complaint last year as it reviewed the cloud computing market.

NetChoice, a lobbying group representing online companies such as Amazon and Google that compete with Microsoft in cloud computing, has criticized Microsoft’s licensing policies and the integration of artificial intelligence tools into Office and Outlook.

“Given that Microsoft is the world’s largest software company and dominates productivity and operating system software, the scale and consequences of its licensing decisions are extraordinary,” the group said.

Google complained to the European Commission in September about Microsoft’s practices, saying it made customers pay a 400% markup to continue running Windows Server on rival cloud computing operators and provided them with later and more limited security updates.

The Federal Trade Commission asked Microsoft to provide extensive details, Bloomberg reported earlier Wednesday.

The agency has already claimed jurisdiction over an investigation into Microsoft and OpenAI over artificial intelligence competition, and has begun investigating Microsoft’s $650 million deal with artificial intelligence startup Inflection AI.

Microsoft is somewhat an exception to recent actions by U.S. antitrust regulators targeting big tech companies for alleged anti-competitive behavior.

Facebook owner Meta Platforms, Apple and Amazon have all been accused by the United States of illegally maintaining monopolies.

Alphabet’s Google is facing two lawsuits, including one in which a judge found the company illegally hindered competition among online search engines.

Microsoft CEO Satya Nadella testified at Google’s trial that the search giant was using exclusive deals with publishers to lock in content used to train artificial intelligence.

It’s unclear whether Trump, whose first administration launched multiple Big Tech investigations, will loosen regulations on Big Tech. Incoming Vice President JD Vance expressed concern about the impact these companies have on public discourse.

“The Trump administration is an aggressive enforcer of antitrust laws,” said Andre Barlow, an attorney at Doyle Barlow & Mazard, noting that the company filed lawsuits against Google and Facebook.

“Agencies will not necessarily abandon ongoing investigations when there is a change in government,” he added, noting that “changes in government may result in changes in enforcement priorities and the level of scrutiny of certain types of conduct.” Change.” Still, Microsoft has benefited from Trump’s policies in the past.

In 2019, the Pentagon awarded it a $10 billion cloud computing contract, which Amazon was widely expected to win. Amazon later claimed that Trump improperly pressured military officials to move contracts away from its Amazon Web Services unit.

(Reporting by Jody Godoy in New York; Additional reporting by Chris Sanders; Editing by Jonathan Otis, Richard Chang, Alistair Bell and Sonali Paul)