The US FTC Launched Tightened Antitrust Probe of Microsoft, Focusing on Cloud Regulation

 

The US Federal Trade Commission (FTC) has launched an antitrust investigation into Microsoft (NASDAQ: MSFT), covering its cloud computing, software licensing business, cybersecurity, and AI offerings. After over a year of informal interviews with Microsoft's competitors and partners, the antitrust enforcement agency formed a detailed request to ask Microsoft for information, according to people familiar with the matter. Sources said that FTC President Lina Khan sent the request she signed to Microsoft.

 

Different sources said that FTC antitrust lawyers would meet with Microsoft competitors next week to collect more information about Microsoft's business practices. Both Microsoft and the FTC declined to comment.

 

The investigation has increased scrutiny of Microsoft's cloud-computing business. Reportedly, the investigative focus is whether Microsoft's bundling of office and security software with cloud services is oriented toward monopolistic behavior.

 

Microsoft's rival companies like Salesforce (NYSE: CRM) said Microsoft's practice of video-conferencing software, Office software, in bundles with its cloud services was anti-competitive by making it harder for them to compete with Microsoft.

 

Microsoft is a major government contractor, offering governmental agencies software and cloud services. Sources noted that the FTC regarded Microsoft as the typical company centralizing the cloud market power due to its cybersecurity mistakes and government contractor identity. Reportedly, the FTC has worried that the centralization of the cloud market may trigger chain reactions in the economy or specific industries.

 

Microsoft's tightened regulatory investigation is a parting move before Khan's retirement and the potential era of looser business regulation under President-elect Donald Trump. But the decision of Microsoft's case will depend on the new FTC president who will be appointed by Trump soon.