U.S. Probes Microsoft’s Licensing and Cloud Business

According to a source familiar with the matter on Wednesday, the U.S. Federal Trade Commission has launched a wide-ranging antitrust investigation into Microsoft, focusing on its software licensing and cloud computing operations.

The probe was approved by FTC Chair Lina Khan ahead of her likely departure in January. The election of Donald Trump as U.S. president and the expectation he will appoint a fellow Republican with a softer approach toward business leave the outcome of the investigation up in the air.

The FTC is examining allegations the software giant is potentially abusing its market power in productivity software by imposing punitive licensing terms to prevent customers from moving their data from its Azure cloud service to other competitive platforms, sources confirmed earlier this month.

The FTC is also looking at practices related to cybersecurity and artificial intelligence products, the source said on Wednesday.

Microsoft declined to comment on Wednesday.

Competitors have criticised Microsoft’s practices, which they say keep customers locked into its cloud offering, Azure. The FTC filed such complaints last year as it examined the cloud computing market.

NetChoice, a lobbying group that represents online companies including Amazon and Google, which compete with Microsoft in cloud computing, criticised Microsoft’s licensing policies and its integration of AI tools into its Office and Outlook.

“Given that Microsoft is the world’s largest software company, dominating in productivity and operating systems software, the scale and consequences of its licensing decisions are extraordinary,” the group said.

Google in September complained to the European Commission about Microsoft’s practices, saying it made customers pay a 400% markup to keep running Windows Server on rival cloud computing operators and gave them later and more limited security updates.

REUTERS