Microsoft has been using restrictive licensing agreements to prevent customers from moving their data to competing platforms. These practices may include increasing subscription fees for customers looking to exit or implementing steep penalties that make leaving cost-prohibitive
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In the final days of President Biden’s administration, US regulators are turning their sights to Microsoft’s cloud computing business, Azure. The Federal Trade Commission (FTC) is reportedly preparing to investigate Microsoft over claims of anti-competitive behaviour.
Allegedly, Microsoft has been using restrictive licensing agreements to prevent customers from moving their data to competing platforms. According to the Financial Times, these practices may include increasing subscription fees for customers looking to exit or implementing steep penalties that make leaving cost-prohibitive.
Additionally, a report by the Financial Times suggests that Microsoft may be making Azure less compatible with rival cloud services, further complicating customers’ attempts to switch.
This probe fits into FTC Chair Lina Khan’s broader campaign against Big Tech. Since her appointment in 2021, Khan has made waves by pushing for tougher antitrust regulations.
As a vocal critic of tech monopolies, she has led high-profile investigations into companies like Google, Amazon, Meta, Apple, and OpenAI. Her tenure, which could end with the Trump administration taking charge, has seen a focus on curbing what she describes as monopolistic behaviours by major tech players.
Cloud computing, an industry valued at nearly $590 billion in 2023, is a critical market, and concerns over competition are widespread. Last year, the FTC invited public feedback on cloud service practices, and many responses flagged issues like restrictive software licensing, excessive data transfer fees, and mandatory spending thresholds.
Khan’s campaign against Big Tech’s alleged monopolistic behaviour hasn’t come without backlash. She noted in a “60 Minutes” interview that the tech sector had experienced a spree of acquisitions over the years, with none being blocked, a situation she believes has led to consumer harm. Her outspoken stance has earned her critics from both political parties.
Some lawmakers have called for her removal, including billionaire investor Mark Cuban, who suggested that Vice President Kamala Harris should replace Khan if elected president. This drew a fierce response from Rep. Alexandria Ocasio-Cortez, who defended Khan and pledged to fight any effort to unseat her.
As part of the Biden administration’s broader push to keep Big Tech in check, the FTC and the Department of Justice have been jointly enforcing antitrust laws. Trump has nominated Rep. Matt Gaetz to lead the Justice Department, though Gaetz’s Senate confirmation may face hurdles. Interestingly, Gaetz, despite his controversial reputation, has supported antitrust actions, claiming Big Tech companies suppress conservative voices.
With the FTC now zeroing in on Microsoft, the investigation could have significant implications for the tech giant, particularly as competition in the lucrative cloud sector continues to heat up. How this plays out, especially with the looming political transition, remains to be seen, but it certainly adds another layer of complexity to the ongoing Big Tech regulatory saga.
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