A source familiar with the situation told Reuters on Wednesday that the U.S. Federal Trade Commission has launched a comprehensive antitrust probe into Microsoft, encompassing its cloud computing and software licensing operations.
NBC News received confirmation of the probe from a source.
Prior to her anticipated departure in January, FTC Chair Lina Khan approved the inquiry. The investigation’s conclusion is uncertain because Donald Trump was elected president of the United States and it is anticipated that he would name a fellow Republican who has a more lenient stance toward business.
According to sources earlier this month, the FTC is looking into claims that the software behemoth may be abusing its market dominance in productivity software by enforcing harsh license conditions to stop users from transferring their data from its Azure cloud service to rival platforms.
The source stated on Wednesday that the FTC is also investigating cybersecurity and AI product practices.
On Wednesday, Microsoft declined to comment.
Microsoft’s policies have drawn criticism from rivals who claim that they force users to use its cloud service, Azure. When the FTC looked into the cloud computing business last year, it received these kinds of concerns.
Microsoft’s licensing practices and the incorporation of artificial intelligence (AI) features into Office and Outlook were challenged by NetChoice, a lobbying group that represents online businesses that compete with Microsoft in the cloud computing space, such as Amazon and Google.
The group claimed that the scope and ramifications of Microsoft’s licensing decisions are unusual, considering that it is the biggest software firm in the world and dominates the market for operating systems and office software.
Google protested to the European Commission in September about Microsoft’s tactics, claiming that it provided customers with slower and less frequent security upgrades and charged them 400% more to continue using Windows Server on competing cloud computing providers.
Microsoft has been asked to provide a wide range of specific information by the FTC, Bloomberg reported earlier Wednesday.
The government began investigating Microsoft’s $650 million transaction with AI company Inflection AI and had already asserted jurisdiction over investigations into Microsoft and OpenAI regarding artificial intelligence competition.
The recent campaign by U.S. antitrust authorities against suspected anticompetitive conduct at Big Tech corporations has been somewhat of an exception for Microsoft.
The United States has accused Amazon.com Inc., Apple, and Meta Platforms, the company that owns Facebook, of illegally preserving monopolies.
In one of the two lawsuits against Alphabet’s Google, a judge determined that the company had illegally obstructed competition among online search engines.
During Google’s trial, Microsoft CEO Satya Nadella testified that the search engine giant was locking up content required to train artificial intelligence through exclusive arrangements with publishers.
Trump’s first government initiated multiple Big Tech investigations, so it’s uncertain if he will relax on the subject. The new vice president, JD Vance, has voiced concerns regarding the influence the corporations have over public opinion.
Nevertheless, Microsoft has previously profited from Trump’s initiatives.
Amazon was predicted to receive a $10 billion cloud computing contract from the Pentagon in 2019. Later, Amazon claimed that Trump improperly pressured military authorities to exclude its Amazon Web Services division from the deal.
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