FTC is Investigating Microsoft for Antitrust Violations

According to multiple reports, the U.S. Federal Trade Commission (FTC) is investigating Microsoft for antitrust violations related to cloud computing, software licensing, cybersecurity, and AI.

The investigation was first reported by Bloomberg, but the Financial Times, The New York Times, and other publications soon confirmed the news.

Apparently, the FTC has been conducting interviews with Microsoft competitors and partners for over one year and presented the company with a detailed set of demands hundreds of pages in length. The scrutiny of Microsoft’s business intensified after what Bloomberg calls “a string of security incidents”–presumably the hack of Microsoft’s infrastructure in late 2023 and then the CrowdStrike incident this past summer–that are especially problematic because of the company is a government contractor.

According to The New York Times’ sources, the FTC believes that multiple Microsoft businesses have violated antitrust laws. Key among the offenses is how it bundles its Office, security, and cloud computing solutions. And its recent push into AI–with its historical investment in OpenAI–is particularly concerning because it seems to be orchestrated specifically to avoid regulatory oversight.

As with a similar investigation in Europe, Microsoft’s cloud licensing are in question because of “punitive” licensing terms that include minimum spends, artificially higher prices for customers that move to different cloud infrastructure, and compatibility issues.

The FTC and Microsoft have so far declined to comment.