The FTC against Microsoft: cloud, AI, and cybersecurity in the spotlight

Microsoft has been battling the Federal Trade Commission of the United States for about two years. At the time, the fight was over the acquisition of the video game giant Activision / Blizzard / King. Now the investigation is focused on its other business areas.

The U.S. Federal Trade Commission (FTC) has launched an antitrust investigation into Microsoft, examining its cloud computing, software licensing, cybersecurity, and artificial intelligence businesses.

The investigation follows more than a year of informal interviews with competitors and business partners, Bloomberg has reported. The FTC’s antitrust lawyers have sent Microsoft a detailed information request, spanning hundreds of pages, after receiving approval from FTC Chair Lina Khan.

The FTC is launching a wide-ranging antitrust investigation into Microsoft and its practices. https://t.co/Qiw0EAVatv pic.twitter.com/0CCT8EDz5V

— CNN Breaking News (@cnnbrk) November 27, 2024

Irregular practices and business from their dominant market position

The investigation focuses on Microsoft’s bundling of productivity and security office software with its cloud services, a practice that critics say harms competitors in the authentication and cybersecurity markets.

The FTC is particularly examining Microsoft Entra ID, its user authentication service, amid complaints that the licensing conditions and integration with its cloud offerings hinder rival companies.

The role of Microsoft as a major government contractor and the recent cybersecurity incidents related to its products have added urgency to the investigation. The company provides services worth billions of dollars to U.S. agencies, including the Department of Defense, making its practices crucial for national security.

In November 2023, the FTC expressed its concern about the concentrated nature of the cloud market, warning that disruptions or performance issues could spread throughout the economy.

The authority then gathered opinions from civil society, sector stakeholders, and academia to prepare its report. According to the feedback received, most of the concerns were related to competition and licensing practices.

Also in the United Kingdom, Microsoft is facing a similar antitrust investigation by the Competition and Markets Authority. The investigation is a result of the complaint filed by AWS with the CMA against Microsoft for unfair business practices.

The FTC’s investigation could have far-reaching implications for the tech giant’s market practices and for the broader cloud and cybersecurity sectors.