Microsoft may be the next target of Big Tech antitrust

Over the past few years, Microsoft has been able to withstand popular calls to crack down on Big Tech while its partners have faced serious lawsuits. But a Federal Trade Commission investigation suggests the grace period may be over.

Earlier this year, Bloomberg has been explained contents of criminal investigations (CIDs) – similar to subpoenas – the FTC sent to at least half a dozen companies that compete with Microsoft. The new findings are Seaside also revealing the FTC’s interests, and showing that the agency is very concerned about the potential impact of Microsoft’s Azure cloud, and its role in the AI ​​industry.

There is no guarantee that the investigation will begin under the leadership of Biden in 2024 and beyond under President Donald Trump – will end with a legal complaint. After further investigation, FTC staff will decide whether to issue a single letter, and the agency’s two commissioners will vote. If it pleads guilty, however, Microsoft could find itself in the same hot seat as it was more than two decades ago, when a court found it to have unconstitutional PC driver software.

Seaside obtained previously undisclosed information about the letters from the companies it reviewed and was not named to discuss non-public information. Seaside he confirmed the document. The questions indicate the FTC is gathering information about the company and its alleged violations, asking about Microsoft’s business agreements, licensing arrangements, and the nature of its products. The essay is usually more than 15 pages long and has more than 15 questions, often with sub-sections.

The CIDs said the purpose of the FTC’s investigation is to determine whether Microsoft has used unfair competition practices in its cloud, software products, and other services in violation of FTC law, the source said. The FTC did not respond to a request for comment. Microsoft spokesman Alex Haurek says the company “fully cooperates with the FTC and believes that our actions promote competition while providing the innovative products that our customers expect.”

Customers they complain – often anonymous for fear of retaliation – that Microsoft 2019 updates according to its licenses it made it more expensive to run Windows software financially outside of Microsoft’s Azure cloud. In 2023, Google answered a A major FTC investigation of business practices in the cloud computing industry and against Microsoft exercising jurisdiction in certain areas to “give their cloud products an unprofitable advantage” and lock out consumers. Microsoft insists there is a lot of competition in the cloud, and Haurek pointed to Google as “a clear example of this dynamic—growth is 63% per year and compete head-to-head with other major providers including AWS, the largest cloud provider. “

He was about to investigate it was saida 2024 ProPublica investigation found that Microsoft used similar tactics to gain access to US government agencies after installing free cybersecurity updates that came with Azure-based products, which would be difficult to replace later. (Government contracts and cyber security were not among the topics CID disclosed Seasideand Haurek says Microsoft responded to a government security request at the time saying that organizations were “open to interacting with other vendors.”)

Microsoft’s growth in cloud computing has taken place has helped raise its ratings to historic highsand his money in space put it in order to prepare for the main computing requirements of AI. Cloud growth has also happened fixed income when hardware including Xbox faced a shortage.

This type of information collection occurs when an investigation is initiated, according to George Washington University law professor and former FTC Chairman William Kovacic. Two members, both Republican Commission they can choose to settle quietly without bringing a complaint, without the commissioners of the minor parties protesting or announcing the decision.

Some of the CID questions seem to want to understand the cloud industry, including questions about company charts, business and marketing plans, and road maps. It asks companies to describe in detail plans to include multiple products and services, as well as prices, discounts, and benefits. Other questions seem to probe how difficult it is to enter markets in which Microsoft operates, and ask about the costs and barriers to entering or expanding these markets. The FTC makes specific inquiries about Microsoft’s impact on competition, requesting documents that touch on Microsoft’s policies or market conditions and information about corporate governance and operating practices, including at Microsoft.

The agency also asks similar questions about competition around AI products, including competing for customers against businesses that integrate additional features or services with AI or software such as Microsoft 365.

These questions show that the agency is trying to figure out which market players to focus on and how important communication strategies are, says Kovacic. AI disclosures may indicate that the FTC views it as a potential source of unconstitutional arrangements or competitive advantage.

The US is not the only country that has been investigating this issue. The European Commission, UK Competition and Markets Authorityand Japan Fair Trade Commission have been exploring Microsoft’s cloud services for the past year. Haurek says Microsoft is “committed to working proactively and proactively with the CMA” in its review and is cooperating with research in Europe and Japan, where the cloud sector has “never been stronger and more competitive.”

As a $3 trillion company, it’s “inevitable” that Microsoft will be the target of third-party antitrust complaints, Kovacic says. In the US, Microsoft has already faced a government problem with the purchase of Activision Blizzard, but in the end he wonand they haven’t faced the problem of disappearing as soon as Google, Meta, Amazon, and Apple.

Meanwhile, Microsoft has remained silent on calls to end Big Tech’s comeback through politics and the halls of Congress. The company’s business-related offerings have helped prevent this child protection and self-control fights which can make political enemies. Kovacic also praises Microsoft’s changes after its regulatory case, saying it is often recognized as “having a good compliance program” and “a good way of dealing with regulators.”

In a landmark 1998 complaint, the Justice Department accused Microsoft of tying its main Windows operating system to its Internet Explorer browser, driving out competitors. When the court ruled against Microsoft, the government settled, allowing it to avoid separation. However, this case is often seen as working in Microsoft and allowing startup companies like Google to succeed.

The lawsuit against Microsoft could affect the AI ​​industry as fewer companies are competing for the market. Even if tech companies win, antitrust suits can take years of litigation as well install internal business operations on the ground microscope. Although so far no one has divorced, apple and Google all subject to court orders prohibiting anti-competitive business practices. Apple and Amazon’s tests have not yet taken place.

Kovacic says it’s enough of a lawsuit against technology that can tip the scales. “The direction of the entire information sector will depend on the resolution of many of the upcoming cases and the investigation of Big Tech,” he says.