US Antitrust Authorities Target Microsoft in Expansive ProbeI

The US Federal Trade Commission (FTC) has initiated a wide-ranging antitrust investigation into Microsoft, scrutinizing its software licensing and cloud computing businesses, according to a source familiar with the matter. The probe, which was greenlit by FTC Chair Lina Khan ahead of her anticipated departure in January, comes amid heightened scrutiny of Big Tech’s business practices. However, the investigation’s trajectory may shift given the recent election of Donald Trump as US president, whose administration is expected to adopt a more business-friendly stance. This raises uncertainty about the investigation’s outcome, especially since Trump is likely to appoint a Republican successor with a softer approach toward regulatory enforcement.

Central to the FTC’s inquiry are allegations that Microsoft may be leveraging its dominance in productivity software to impose restrictive licensing terms, potentially discouraging customers from transferring their data from its Azure cloud platform to competing services. These allegations suggest Microsoft could be using its market power to stifle competition, particularly in the cloud computing sector. The investigation also extends to Microsoft’s practices in cybersecurity and artificial intelligence, areas where the company’s rapid expansion has drawn increased regulatory attention.

Microsoft has not issued a public statement regarding the investigation. However, industry watchdogs have long raised concerns. Last year, NetChoice, a lobbying group representing major tech players like Amazon and Google—both competitors of Microsoft in cloud computing—criticized Microsoft’s licensing practices and the integration of AI tools into its Office suite 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,” NetChoice stated.

The FTC’s demands for detailed information from Microsoft, as reported by Bloomberg, signal the scope of the inquiry. Until now, Microsoft has largely escaped the intense antitrust scrutiny directed at other Big Tech giants. Companies like Meta (Facebook’s parent), Apple, Amazon, and Google have faced legal battles over alleged monopolistic practices. Google, for instance, is currently entangled in two major lawsuits, including one where it was found to have unlawfully restricted competition among online search engines. Microsoft’s CEO, Satya Nadella, even testified during Google’s trial, accusing the search giant of using exclusive agreements with publishers to dominate the AI content training market.

The broader context of this investigation is complicated by political dynamics. It is unclear whether Trump’s administration will maintain pressure on Big Tech. His first term saw the launch of several investigations into major tech firms, though his policies also benefited some, including Microsoft. In 2019, Microsoft secured a controversial $10 billion cloud computing contract with the Pentagon—a contract Amazon was widely expected to win. Amazon later alleged that Trump improperly influenced the decision, aiming to steer the contract away from its Amazon Web Services division.

JD Vance, the incoming vice president, has voiced concerns about the influence Big Tech exerts over public discourse, suggesting some continuity in scrutinizing the sector. However, the extent to which Microsoft will remain a focus under the new administration remains to be seen. Despite benefiting from certain policies during Trump’s first term, Microsoft now finds itself at the center of a potentially landmark antitrust case, which could reshape the regulatory landscape for the tech industry.