Microsoft facing FTC antitrust probe over cloud, AI competition concerns

The US Federal Trade Commission (FTC) is investigating Microsoft over antitrust issues, according to sources cited in multiple reports.

While the reports suggest the FTC is examining multiple facets of Microsoft's business, including AI, Office, and security, the focus appears to be cloud computing and how its Azure services are bundled with its other products and services.

According to the New York Times, the FTC has formally requested information about Microsoft's cloud computing, security and AI products.

Bloomberg reports the information request runs into the hundreds of pages, with the FTC and Microsoft set to meet next week. Beyond the cloud, the reports suggest Microsoft's AI business is coming under specific scrutiny.

Those reports follow one in the Financial Times earlier this month which suggested the FTC was set to launch an investigation specifically into Microsoft's cloud computing business amid claims the company makes it too hard to move data from Azure to rival providers.

Last year, the FTC ran a consultation about the cloud computing market, finding concerns around software licensing, egress (or data transfer) fees, and minimum spend contracts.

Meanwhile, the FTC already has an industry wide inquiry into partnerships between technology companies and AI startups. Microsoft has invested nearly $14 billion into OpenAI.

As yet, the FTC has made no statement regarding the investigation. IT Pro contacted Microsoft for comment, but has not responded at the time of publishing.

Microsoft’s cloud woes continue

The FTC's investigation into the cloud market echoes similar activity by regulators in the UK and Europe. The UK Competition and Markets Authority (CMA) is looking into antitrust issues in the cloud market centered on Microsoft and Amazon.

Meanwhile, a formal complaint was filed to the EU concerning Microsoft's cloud practices, but any action was cut short after the company signed a controversial deal with complainants in July.

Generally, the complaints center around how Microsoft bundles its products, which critics claim makes it more expensive to use a rival cloud provider with Microsoft software than to use Microsoft's Azure alongside its Office and other products.

Companies using Azure will end up paying more to switch to another provider, as they'll need to shell out for additional licenses, critics say.

Of course, this isn't the first battle between the government and Microsoft, and comes more than two decades after Microsoft was sued by the US government over antitrust concerns, with the company narrowly dodging being broken up.