Bloomberg reported that the investigation followed more than a year of informal interviews with competitors and business partners. Bloomberg, citing sources familiar with the internal affairs, said FTC antitrust lawyers sent Microsoft hundreds of pages of detailed information requests after receiving approval from FTC Chairman Lina Khan.
Computerworld recently reported that the FTC is investigating Microsoft’s business practices for antitrust charges. According to the report, suspicions were raised that Microsoft was abusing its market power through restrictive licensing terms, and this was considered an unfair practice.
Focus on market power and security practices
The investigation focuses on Microsoft bundling office productivity and security software with its cloud services. Critics argue that this practice disadvantages competitors in the authentication and cybersecurity markets. The FTC is paying particular attention to Microsoft’s user authentication service, Entra ID, amid complaints that its integration with cloud services and licensing terms hinder the activities of competitors.
Microsoft’s role as a major government contractor and recent cybersecurity incidents with its products have added urgency to the investigation. Microsoft provides billions of dollars worth of services to several U.S. government agencies, including the U.S. Department of Defense, and its practices are directly related to national security.
In November 2023, the FTC expressed concern about the concentrated nature of the cloud market, warning that service outages or performance issues could have ripple effects throughout the economy. The authorities then prepared a report by collecting opinions from civil society, industry stakeholders, and academia. According to feedback, most concerns were about competition and licensing practices.
Meanwhile, the UK’s CMA is also conducting a similar antitrust investigation into Microsoft. The CMA’s investigation follows a complaint made by AWS about Microsoft’s unfair trade practices.
Leadership transition and regulatory uncertainty
The investigation is a representative effort by FTC Chairman Lina Khan as she leads the first aggressive campaign against corporate consolidation in decades. Khan is expected to step down as President-elect Donald Trump prepares to take office, but there has been no official confirmation yet.
The Trump administration’s regulatory policy is not yet clear, but it is likely that it will unfold in a different direction than President Joe Biden’s administration, which focused on regulating Big Tech. Under the Biden administration, the FTC has filed lawsuits against Amazon and Meta, and the Justice Department has been pursuing lawsuits against Google and Apple.
This investigation is the most notable case since an antitrust case 25 years ago in which Microsoft faced the U.S. government over its bundling of the Windows OS and browser, and the case was concluded without a spin-off.
The FTC’s investigation could have far-reaching implications not only for Microsoft’s market practices but for the cloud and cybersecurity industries as a whole.
The FTC and Microsoft did not respond to Computerworld’s inquiries about the investigation.
editor@itworld.co.kr
Source: www.itworld.co.kr
