Nov 27 (Reuters) – The U.S. Federal Trade Commission has begun a wide-ranging antitrust probe into Microsoft, which encompasses the software licensing and cloud services divisions, a source familiar with the situation revealed on Wednesday.
The probe was blessed by FTC Chair Lina Khan before her likely exit in January next year. The emergence of Donald Trump as the president of the United States, and the belief that he will appoint another Republican with a more friendly attitude toward business makes the fate of the investigation uncertain.
The FTC is studying claims the software giant is likely using its dominance in productivity software to set unfavourable licensing terms that would bar clients from migrating their data from its Azure cloud service to other rivals, as sources revealed earlier this month.
The FTC is also looking at practices concerning cybersecurity and artificial intelligence products, the source said on Wednesday.
Microsoft did not respond to requests for comment on Wednesday.
Some of the complaints that competitors have leveled against Microsoft they claim prevents customers from leaving Azure. Such complaints were reported to the FTC last year while it was investigating the cloud computing industry.
NetChoice, a lobbying group funded by internet businesses such as Amazon and Google, which are Microsoft’s competitors in cloud services, has condemned the company’s licensing terms and its incorporation of AI tools into Office and Outlook.
Since Microsoft is the largest software company in the world, a leader in productivity and operating system software, the scope and impact of its licensing decisions are unprecedented, the group stated.
As Bloomberg reported earlier on Wednesday, the FTC has asked Microsoft to provide a wide array of specific information. The agency had already taken over probes into Microsoft and OpenAI for competition in AI and began investigating Microsoft’s $650 million deal with AI startup Inflection AI.
Microsoft has been somewhat of an exception to U.S. antitrust regulators’ recent campaign against allegedly anticompetitive practices at Big Tech companies.
Meta Platforms, the owner of Facebook, Apple, and Amazon.com Inc have all been charged by the U.S. of engaging in unlawful monopolization.
Alphabet’s, opens new tab Google is currently involved in two litigations, one of which saw a judge determine that the company was operating unlawfully to subvert competition among online search engines.
Microsoft chief Satya Nadella also took the stand at Google’s trial where he accused the search giant of using the exclusivity of deals with publishers to monopolise content used to train AI.
Some analysts have questioned whether Trump will ease up on Big Tech, which his first administration investigated. JD Vance, the incoming vice president, has also raised alarm about the influence the companies have over public debate.
‘When administrations change, the agencies do not necessarily drop ongoing investigations,’ he added, pointing out that ‘changes in administration can lead to changes in enforcement priorities and in how vigorously some types of conduct are pursued.’
However, Microsoft has been on the receiving end of Trump policies in the past.
It was given a $10 billion contract for cloud computing by the Pentagon in 2019, which many had believed would be awarded to Amazon. Amazon has accused Trump of applying unlawful influence on the Department of Defense to award the contract to a company other than Amazon’s AWS.