FTC Investigates Microsoft Cloud Practices, Demands Information From Competitors

The Federal Trade Commission sent civil investigative demands to at least half a dozen companies that compete with Microsoft. The demands, more than 15 pages long and containing over 15 questions with extensive sub-parts, seek information on company organizational charts, business and marketing plans, product roadmaps, bundling practices, pricing, discounting, profitability, and barriers to entry in markets where Microsoft operates.

The Verge obtained previously unreported details about the letters from an industry source who reviewed them and verified the document.

The CIDs state that the goal of the probe is to determine if Microsoft has used unfair methods of competition in its cloud, software products, and related services in violation of the FTC Act. The investigation began under the Biden administration in 2024 and has continued under President Donald Trump.

The FTC asks some similar questions about competition around AI products, including how companies compete against businesses that combine extra features or services with an AI or software product like Microsoft 365.

Haurek also said Microsoft is “committed to working quickly and constructively with the CMA” on its review and is cooperating with investigations in Europe and Japan. Customers complained that Microsoft’s 2019 changes to its licensing terms made it more costly to run Windows software on infrastructure outside of Microsoft’s Azure cloud.

In 2023, Google responded to a broad FTC inquiry about cloud computing business practices by accusing Microsoft of using dominance in other areas to “give their own cloud products an unearned advantage” and lock in consumers.

Microsoft’s growth in cloud computing has helped push its valuation to historic highs as a $3 trillion company. S. government agencies after installing free cybersecurity upgrades that came with products that specifically ran on Azure.

Government contracts and cybersecurity were not among the CID topics disclosed to The Verge. ” The European Commission, UK Competition and Markets Authority, and Japan Fair Trade Commission have been investigating Microsoft’s cloud services within the last year. Microsoft has already faced a government challenge of its Activision Blizzard acquisition but prevailed.

In a landmark 1998 complaint, the Department of Justice accused Microsoft of illegally tying its dominant Windows operating system to its Internet Explorer browser. A court ruled against Microsoft, but the government settled, allowing the company to avoid a breakup. The FTC did not respond to a request for comment.

There is no guarantee the investigation will end in a legal complaint.