Microsoft faces wide-ranging antitrust investigation in the US
The US Federal Trade Commission (FTC) has launched a wide-ranging antitrust investigation that includes Microsoft’s software licensing and cloud computing businesses. This investigation was approved before FTC Chairwoman Lina Khan left her position in January. The election of Donald Trump as US President and the expectation of a Republican appointee with a softer approach to business make the outcome of the investigation uncertain.
SCOPE OF THE INVESTIGATION AND ALLEGATIONS
The FTC is examining whether software giant Microsoft abused its market power by imposing punitive licensing requirements to prevent customers from moving their data from its Azure cloud service to other competitive platforms. It is also stated that the FTC is also examining practices related to cyber security and artificial intelligence products. Microsoft declined to comment on this matter.
Rivals are targeting Microsoft’s practices that lock customers into its Azure cloud service. It is emphasized that a lobby group representing online companies such as NetChoice, Amazon and Google criticized Microsoft’s licensing policies and integration of artificial intelligence tools into Office and Outlook. Google filed a complaint with the European Commission in September, saying Microsoft demanded a 400 percent price increase from customers to continue running Windows Server on rival cloud computing operators and provided more limited security updates.
MICROSOFT’S RESPONSE TO FTC’S REQUESTS
The FTC requested a wide range of detailed information from Microsoft. The agency had requested authorization to examine the competition between Microsoft and OpenAI and began reviewing Microsoft’s $650 million deal with AI startup Inflection AI. Microsoft is seen as an exception to recent campaigns by US antitrust regulators.
Meta Platforms, owner of Facebook, was accused by Apple and Amazon USA of creating an illegal monopoly. Alphabet’s Google is facing two lawsuits alleging it illegally stifles competition among online search engines. Microsoft CEO Satya Nadella testified in Google’s lawsuit, stating that Google made special agreements with publishers to lock down content used for AI training.
TRUMP POLICIES HAVE PROVIDED BENEFITS IN THE PAST
Trump’s first administration launched several major technology investigations. The new vice president, J.D. Vance, expressed concerns about the power corporations have over public opinion. The Trump administration was an aggressive enforcer of antitrust laws and filed lawsuits against Google and Facebook. Management changes may cause agencies to abandon ongoing investigations.
Microsoft has benefited from Trump policies in the past. In 2019, the Pentagon gave the $10 billion cloud computing contract to Microsoft, which Amazon was expected to win. Amazon later claimed that Trump pressured military officials to take the contract away from its Amazon Web Services unit.