Microsoft Accuses the FTC of Ethics Violations

Microsoft deputy general counsel Rima Alaily accused the U.S. Federal Trade Commission of violating its ethics standards by leaking an antitrust investigation of the company to the press. An investigation the FTC still hasn’t formally discussed with Microsoft, she claims.

“I ask you to investigate whether FTC management improperly leaked this confidential information to the press in violation of the agency’s ethics rules and rules of practice,” she writes in a letter to FTC inspector general Andrew Katsaros. “Ironically, almost a week after telling the press about an information demand issued to Microsoft, we still cannot even obtain from the FTC a copy of this document.”

As you may recall, Bloomberg, The New York Times, and other publications reported last week that the FTC is investigating Microsoft for several antitrust violations related to cloud computing, software licensing, cybersecurity, and AI. But the FTC has still not informed Microsoft of these charges, Alaily says, and the initial Bloomberg report is suspiciously consistent with “an unfortunate trend” Microsoft has seen over the past two years in which the FTC “strategically leaks nonpublic information” to the press.

According to Alaily, Microsoft learned about this FTC investigation from Bloomberg “like the rest of the world,” and that the agency has never filed a single legal demand, nor would it confirm the report when asked. Alaily further notes that Mr. Katsaros has publicly condemned the fact that the volume of unauthorized disclosures of non-public information has been “steadily increasing” under FTC chairperson Lina Khan, and that “it appears that the media may be obtaining significant amounts of [non-public information] from sources within the FTC.”

Alaily “strongly urges” that the FTC inspector investigate this incident and make its findings public.

Leaving aside the hypocrisy of Microsoft, a company accused of ethical violations related to its AI training, accusing a federal agency of ethical violations, the charges are rather incredible. The original Bloomberg report does cite multiple sources, and it makes sense that each is within the FTC. But the allegation here is that this leak was purposefully orchestrated by FTC “management,” and it specifically references chairperson Lina Khan, a controversial figure at best, three times.

It may also be worth pointing out that this is the second time recently in which Alaily has publicly railed against an opponent: In late October, she accused Google Cloud of a “massive astroturf campaign” against her company, and Google’s response raised serious issues with her arguments. Are these events outliers, or has Microsoft initiated a new era in which it no longer as accommodating as it’s been with antitrust? I do find it odd that her FTC complaint was made on LinkedIn and not on an official Microsoft blog or press site, for starters.