A sweeping antitrust investigation into Microsoft has been launched by the U.S. Federal Trade Commission (FTC), raising questions about the tech giant’s dominance in cloud computing, software licensing, and artificial intelligence markets. The inquiry, initiated by FTC Chair Lina Khan, comes as her tenure nears its end and the political landscape shifts with Donald Trump’s return to the presidency.
Cloud Competition Concerns
Central to the investigation are claims that Microsoft’s Azure cloud service employs restrictive licensing terms that hinder customers from switching to rival platforms. Competitors argue these practices unfairly lock businesses into Microsoft’s ecosystem, stifling innovation and competition in the cloud sector.
Lobbying group NetChoice, representing Amazon, Google, and others, has criticized Microsoft’s integration of AI tools into its productivity software, accusing the company of leveraging its market power to disadvantage rivals. The European Commission has also received complaints, with Google alleging exorbitant markups for running Windows Server on competing clouds.
AI and Cybersecurity Under the Lens
The FTC is delving deeper into Microsoft’s role in the artificial intelligence market, scrutinizing its $650 million investment in AI startup Inflection AI and its partnerships with OpenAI. Additionally, Microsoft’s cybersecurity practices are part of the broader investigation, signaling a comprehensive review of the company’s influence across multiple sectors.
Shifting Regulatory Climate
The probe’s future remains uncertain under the new administration. While Trump’s first term saw aggressive antitrust actions against Big Tech, including lawsuits targeting Google and Facebook, Microsoft has historically fared well under his policies, benefiting from major contracts like the Pentagon’s $10 billion JEDI cloud deal.
Industry Implications
Microsoft has largely avoided the intense scrutiny faced by other tech giants such as Google, Meta, and Apple. However, this investigation could signal a turning point, potentially reshaping how regulators address competition in rapidly evolving markets like AI and cloud computing.
As the FTC gathers evidence, the outcome of this investigation could have far-reaching consequences, not only for Microsoft but also for the broader tech industry navigating increasing regulatory pressure.
