The US Federal Trade Commission (FTC) has launched a broad antitrust investigation into Microsoft, focusing on the company’s cloud computing, software licensing, artificial intelligence (AI) and cybersecurity offerings. The investigation marks a renewed scrutiny of Microsoft’s business practices, reminiscent of its legal battles over bundled software in the 1990s.
The FTC is said to have compiled a detailed hundreds-of-page request for information for Microsoft, reflecting concerns about bundling software products like Microsoft Teams with its Office suite and cloud services. Critics argue that this practice creates barriers for competitors like Slack and Zoom, limiting competition in key markets.
Microsoft’s role as a major government contractor has also attracted attention. The FTC is reportedly investigating security flaws involving Microsoft products, including incidents affecting millions of devices earlier this year. These failures, combined with Microsoft’s market power, have been flagged as problems with broader economic implications. The FTC highlighted the risks of market concentration in a November report, saying disruptions at major cloud providers could spill over into critical sectors of the economy.
At the center of the investigation is Microsoft Entra ID, formerly Azure Active Directory, a widely used tool for authenticating logins to cloud-based software. Competitors have raised concerns about Microsoft’s licensing terms, arguing that they undermine rival authentication and cybersecurity vendors.
FTC lawyers will meet with Microsoft’s competitors in the coming weeks to gather further insights. The investigation was reportedly given the green light by FTC Chairwoman Lina Khan ahead of her early departure in January, raising questions about the trajectory of the case under a new president likely to be appointed by President-elect Donald Trump.
Neither Microsoft nor the FTC have commented publicly on the investigation.
Microsoft shares are currently down 1.17% at $422.99.