The US Federal Trade Commission (FTC) has initiated a broad antitrust investigation into Microsoft, focusing on the company’s cloud computing, software licensing, artificial intelligence (AI) and cybersecurity offerings. The probe 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, multi-hundred-page information request for Microsoft, reflecting concerns over its bundling of software products like Microsoft Teams with its Office suite and cloud services. Critics argue this practice creates barriers for competitors such as Slack and Zoom, limiting competition in key markets.
Microsoft’s role as a major government contractor has also drawn attention. The FTC is reportedly investigating security lapses involving Microsoft products, including incidents affecting millions of devices earlier this year. These failings, combined with Microsoft’s market power, have been flagged as issues with broader economic implications. The FTC highlighted the risks of market concentration in a November report, stating that disruptions at major cloud providers could cascade across critical sectors of the economy.
Central to the probe is Microsoft Entra ID, formerly Azure Active Directory, a widely used tool for authenticating cloud-based software logins. Competitors have raised concerns about Microsoft’s licensing terms, claiming they undermine rival authentication and cybersecurity providers.
FTC lawyers are set to meet with Microsoft’s competitors in the coming weeks to gather additional insights. The investigation was reportedly greenlit by FTC Chair Lina Khan before her anticipated departure in January, raising questions about the case’s trajectory under a new chair likely to be appointed by President-elect Donald Trump.
Neither Microsoft nor the FTC has commented publicly on the investigation.
Shares in Microsoft are currently down 1.17% at US$422.99.