Microsoft faces wide-ranging US antitrust probe

NEW YORK — The US Federal Trade Commission (FTC) has opened a broad antitrust investigation into Microsoft, including of its software licencing and cloud computing businesses, a source familiar with the matter said on Nov 27.

The probe was approved by FTC chair Lina Khan ahead of her likely departure in January. The election of Donald Trump as US president, and the expectation he will appoint a fellow Republican with a softer approach toward business, leaves the outcome of the investigation up in the air.

The FTC is examining allegations the software giant is potentially abusing its market power in productivity software by imposing punitive licencing terms to prevent customers from moving their data from its Azure cloud service to other competitive platforms, sources confirmed earlier this month.

The FTC is also looking at practises related to cybersecurity and artificial intelligence products, the source said on Nov 27.

Microsoft declined to comment.

Competitors have criticised Microsoft's practises they say keep customers locked into its cloud offering, Azure. The FTC fielded such complaints last year as it examined the cloud computing market.

NetChoice, a lobbying group that represents online companies including Amazon and Google, which compete with Microsoft in cloud computing, criticised Microsoft's licencing policies, and its integration of AI tools into its Office and Outlook.

"Given that Microsoft is the world's largest software company, dominating in productivity and operating systems software, the scale and consequences of its licencing decisions are extraordinary," the group said.

Google in September complained to the European Commission about Microsoft's practises, saying it made customers pay a 400 per cent mark-up to keep running Windows Server on rival cloud computing operators, and gave them later and more limited security updates.

The FTC has demanded a broad range of detailed information from Microsoft, Bloomberg reported earlier on Nov 27.

The agency had already claimed jurisdiction over probes into Microsoft and OpenAI over competition in artificial intelligence, and started looking into Microsoft's US$650 million (S$872 million) deal with AI start-up Inflection AI.

Microsoft has been somewhat of an exception to US antitrust regulators' recent campaign against allegedly anticompetitive practises at Big Tech companies.

Facebook owner Meta Platforms, Apple, and Amazon.com have all been accused by the US of unlawfully maintaining monopolies.

Alphabet's Google is facing two lawsuits, including one where a judge found it unlawfully thwarted competition among online search engines.

Microsoft chief executive Satya Nadella testified at Google's trial, saying the search giant was using exclusive deals with publishers to lock up content used to train artificial intelligence.

It is unclear whether Trump will ease up on Big Tech, whose first administration launched several Big Tech probes. JD Vance, the incoming vice president, has expressed concern about the power the companies wield over public discourse.

Still, Microsoft has benefited from Trump policies in the past.

In 2019, the Pentagon awarded it a US$10 billion cloud computing contract that Amazon had widely been expected to win. Amazon later alleged that Trump exerted improper pressure on military officials to steer the contract away from its Amazon Web Services unit.

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