The US Federal Trade Commission has opened an antitrust investigation Microsoft Corp., from the company’s cloud computing and software licensing businesses to cybersecurity offerings and artificial intelligence products.
After more than a year of informal talks with competitors and business partners, anti-competitive lawmakers have made a specific request to force Microsoft to return the information, according to people familiar with the matter. The hundreds-of-page petition was sent to the company after FTC Chairman Lina Khan signed it, one of the people said.
They will meet with FTC regulators next week to gather more information about the Redmond, Wash.-based company’s business practices, according to two other people familiar with the plans who, like the others, asked not to be named to discuss a confidential matter.
Microsoft and the FTC declined to comment.
The FTC’s investigation into Microsoft’s cloud computing business gained momentum after a series of cybersecurity incidents involving the company’s products. The company is a major government contractor, providing billions of dollars in software and cloud services to US agencies, including the Department of Defense.
Microsoft’s request for information is one of Khan’s individual shots as he steps down after leading one of the agency’s most aggressive pushes against entrenched corporate power in decades. While business leaders hope President-elect Donald Trump will usher in an era of lighter regulation, it will be up to his new FTC chair — as yet unnamed — to decide how to proceed with the case.
The FTC’s investigation renews its scrutiny of Microsoft’s business practices more than 25 years after the government sued the company and tried unsuccessfully to break it up for similar behavior that tied the Windows operating system and browser together.
The focus of the current probe is on Microsoft tying its popular office productivity and security software to its cloud offerings, according to people familiar with the request for information.
Microsoft’s cybersecurity lapses, along with its reputation as a government contractor, are seen by the FTC as examples of the company’s problematic market power, the people said.
In a November 2023 report, the FTC highlighted concerns that the concentrated nature of the cloud market means that “outages or other problems that disrupt a cloud provider’s service could have a significant impact on the economy or specific sectors.”
The CrowdStrike crash, which affected millions of devices running Microsoft Windows systems, was itself a demonstration of the widespread use of the company’s products and the direct impact they have on the global economy.
Part of the probe is focused on practices related to security software called Microsoft Entra ID, formerly known as Azure Active Directory, which helps authenticate users logging into the cloud-based software, some of the people said.
Competitors have complained that Microsoft’s licensing terms and bundling of software with cloud services make it difficult for rival authentication and cybersecurity companies to compete.
companies like Salesforce Inc.’s Slack and Zoom in Communications Inc. has said that Microsoft giving away its Teams video conferencing software for free in a bundle with popular software products like Word and Excel is anti-competitive and makes it harder to compete.
