FTC Investigates Microsoft’s Moves - Licensing Practices Under Fire
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The US Federal Trade Commission (FTC) has turned its antitrust radar onto Microsoft, initiating a comprehensive investigation into its software licensing practices, cloud computing business, and potentially anticompetitive behavior in AI and cybersecurity markets.
This move, greenlit by FTC Chair Lina Khan, comes at a potentially transitional moment in U.S. politics, as the incoming Trump administration could bring a shift in regulatory priorities, leaving the investigation's future uncertain.
At the heart of the probe are allegations that Microsoft may be leveraging its dominance in productivity software to impose restrictive licensing terms, effectively locking customers into its Azure cloud platform.
Competitors have long claimed that Microsoft’s policies discourage data migration to rival cloud providers, creating barriers to competition. Groups like NetChoice, representing players like Amazon and Google, have been vocal about these practices, pointing to licensing policies that purportedly keep customers tethered to Azure.
The complaints don’t stop there—Microsoft's integration of AI tools into its flagship products, like Office and Outlook, has also raised concerns about stifling competition.
Adding fuel to the fire, Google recently took its grievances to the European Commission, accusing Microsoft of charging a staggering 400% markup for running Windows Server on non-Microsoft cloud platforms while providing delayed and less robust security updates. Such practices have drawn scrutiny beyond the FTC, emphasizing Microsoft's central role in the growing cloud computing and AI industries.
The FTC’s investigation isn’t limited to licensing or cloud computing. It extends to broader AI-related concerns, including Microsoft’s acquisition of Inflection AI for $650 million and its competitive dynamics with OpenAI. Microsoft has heavily invested in OpenAI, embedding its AI technologies across its ecosystem, a strategy that rivals argue amplifies its market power unfairly.
Historically, Microsoft has largely avoided the intense regulatory scrutiny that has plagued other Big Tech companies like Alphabet, Meta, and Apple. These companies are entangled in lawsuits alleging monopolistic behavior, from search engine dominance to content exclusivity deals.
Ironically, Microsoft CEO Satya Nadella recently testified against Google in an antitrust trial, accusing it of using exclusive contracts to consolidate control over AI training content—an allegation echoing the criticisms now directed at Microsoft itself.
The political backdrop adds another layer of intrigue. The Trump administration has historically shown a willingness to enforce antitrust laws aggressively, launching major lawsuits against Google and Facebook. Whether this scrutiny will extend to Microsoft remains to be seen, especially given its past advantages under Trump-era policies.
Notably, Microsoft benefited from a controversial $10 billion Pentagon cloud computing contract, which Amazon argued was unfairly influenced by Trump's personal disdain for Amazon founder Jeff Bezos.
As the FTC presses Microsoft for detailed information on its business practices, the tech giant faces growing challenges in balancing its expansive ambitions with regulatory compliance. This investigation underscores a broader reckoning in Big Tech, where even industry leaders like Microsoft are finding themselves under the microscope for how they wield their immense influence.
The stakes are enormous—not just for Microsoft but for the tech industry at large. If the FTC determines that Microsoft has crossed competitive lines, the fallout could reshape the regulatory landscape for AI, cloud computing, and software licensing.
For now, Microsoft's future remains in the hands of investigators, policymakers, and perhaps a shifting political tide that could either reinforce or derail the current momentum.