Microsoft under FTC investigation over antitrust concerns
Microsoft is facing an antitrust probe by the Federal Trade Commission (FTC), Bloomberg reported. This is the fifth major tech company to come under the scanner in recent years. The probe is mainly centered around Microsoft's cloud and software licensing business, cybersecurity services, and artificial intelligence (AI) offerings.
FTC's investigation spans multiple areas of Microsoft's operations
The FTC's probe into Microsoft comes in the form of a request for information running into hundreds of pages and after more than a year of informal conversations with competitors and partners. A major area of concern is how Microsoft bundles productivity and security software with its Azure cloud. The FTC's interest in Microsoft's cloud business grew after several security incidents affecting its products.
Microsoft's security culture under scrutiny
Earlier this year, the government Cyber Safety Review Board had concluded that "Microsoft's security culture was inadequate and requires an overhaul, particularly in light of the company's centrality in the technology ecosystem." Following this finding, Microsoft CEO Satya Nadella had issued a memo to employees emphasizing the need to prioritize security over other objectives. Both Microsoft and FTC have declined to comment on the ongoing investigation.
FTC investigates Microsoft's market power and licensing terms
The FTC is also looking into allegations that Microsoft may be abusing its market power in productivity software by imposing restrictive licensing terms. These terms allegedly prevent customers from transferring their data from Azure cloud service to other competitive platforms. Competitors have criticized these practices, claiming they keep customers tied to Azure.
Tech industry voices concerns over Microsoft's practices
NetChoice, a lobbying group for online companies like Amazon and Google, has also slammed Microsoft's licensing policies and its bundling of AI tools with Office and Outlook. In September, Google had filed a complaint with the European Commission against Microsoft's practices. The search giant alleged that Microsoft forced customers to pay a 400% mark-up to continue using Windows Server on rival cloud computing operators while offering them delayed and more limited security updates.
FTC's investigation extends to Microsoft's AI ventures
The FTC has also sought detailed information from Microsoft on competition in artificial intelligence (AI). The agency had previously claimed jurisdiction over probes into Microsoft and OpenAI. It started investigating Microsoft's $650 million deal with AI start-up Inflection AI. This wide-ranging investigation highlights the FTC's determination to examine big tech companies for potential antitrust violations.
