US FTC launches investigation into Microsoft

The US Federal Trade Commission (FTC) has opened an antitrust investigation into Microsoft, focusing on its cloud computing, software licensing, and artificial intelligence (AI) business practices, according to a recent report by Reuters. The investigation is part of a broader effort to address concerns about large tech companies using their power to block competition.

What's the problem?

The FTC is looking into complaints about Microsoft making it hard for customers to switch from its Azure cloud platform to competitors like Amazon or Google. As per Reuters, critics claim Microsoft charges high fees—up to 400% more—for running its Windows Server on competing platforms. They also say Microsoft delays important security updates for those who don't use its cloud services

In addition, Microsoft's integration of AI tools, like those in Office and Outlook, is under review. Regulators want to ensure these practices aren't being used to unfairly block competition in the growing AI market, states the report.

Why this is important

Microsoft is one of the biggest software companies in the world, with tools like Office and Windows used by millions. If these claims are true, Microsoft could be limiting customer choice, increasing costs, and holding back innovation in critical areas like cloud computing and AI.

The investigation was approved by FTC Chair Lina Khan, who, according to the Reuters report, is known for being tough on tech giants. However, her upcoming departure in January and the recent election of Donald Trump as president could change the direction of the investigation.

Trump's previous administration had a mixed record, aggressively investigating some tech companies like Google but appearing more lenient toward others, including Microsoft.

Nonetheless, this investigation is part of a larger effort to regulate big tech companies. Rivals like Google, Amazon, and Meta have already faced lawsuits over unfair competition. Microsoft, until now, has avoided much of this scrutiny, but this new investigation shows that regulators are turning up the heat.

The FTC has asked Microsoft for detailed information, and it is expected to be a thorough probe. The outcome could shape the rules for how big tech companies operate in the future, affecting both businesses and consumers.