In a nutshell: Everyone is complaining about how Microsoft does business in the cloud, and the Federal Trade Commission has finally decided to step in. While the Commission has not formally opened an investigation, hopes are that the exchange of power between the outgoing and incoming presidential administrations won’t hinder efforts.
The FTC is considering opening a new investigation into Microsoft, a company accused time and time again of employing anticompetitive practices to hinder competitors in the lucrative cloud business. Unnamed sources spilled the beans to the Financial Times, stating that the federal agency asked industry players for relevant feedback before deciding to start a formal probe.
Redmond competitors told the FTC that Microsoft is forcing customers to use its Azure platform by using unlawful practices to block third-party cloud services. Microsoft is allegedly making Office 365 products incompatible with other cloud platforms and requiring costly exit fees for customers considering leaving Azure.
The FTC investigation would also look into alleged minimum spending contracts that Microsoft offers to companies at significant discounts if they agree to a certain spending level. The US agency listened to feedback from public cloud providers, and competitors highlighted that some software licensing practices were forcing customers to stay on Azure in perpetuity.
This investigation will be the last major initiative by FTC Chair Lina Khan, who has served as the youngest chair (35) since President Joe Biden appointed her in 2021. Khan was particularly active against Big Tech’s anticompetitive behavior, stating that her agency was going after the “mob bosses” in the technology business rather than the “henchman” at the bottom.
When President-elect Donald Trump takes office on January 20, 2025, Khan’s tenure at the FTC will likely end. Fortunately, the fight against technology giants is one of the few political issues that attracts bipartisan support in Washington. So, a new FTC boss could continue Khan’s investigation against Microsoft and other technology monopolists in the future.
Redmond is one of the “Big Three” ventures in the cloud business, fighting for market share with Amazon and Google. In 2023, Google alleged that Microsoft abused its dominant position to gain an anti-competitive advantage in the European cloud sector. Microsoft reacted by accusing Google of funding “shadow campaigns” by hostile lobbying organizations to undermine its position with EU regulatory authorities.