FTC to launch investigation into Microsoft’s cloud computing business

The Federal Trade Commission (FTC) is set to launch an investigation into Microsoft’s cloud computing business.

First reported by the Financial Times, the FTC is looking into alleged anticompetitive practices surrounding Microsoft’s licensing terms.

The investigation is looking into whether Microsoft’s licenses prevent customers from moving data to other cloud platforms through tactics such as increasing subscription fees for those that leave, and making their Office 365 products incompatible with other clouds.

According to the FT, the FTC has not yet formally requested documents or other information from Microsoft as part of the investigation.

The investigation is being initiated by the FTC’s chair, Lina Khan, who will be replaced after Donald Trump enters the White House next year.

During Khan’s time at the FTC, the commission has launched investigations into Microsoft and OpenAI’s influence in the artificial intelligence (AI) industry and another into AI deals made by OpenAI, Microsoft, Google, Amazon, and Anthropic.

The FTC first put out a request for information on the business practices of cloud providers in March 2023. Shortly after, Google publicly accused Microsoft and Oracle of anti-competitive practices in an 11-page letter.

Microsoft is no stranger to such investigations. Across the pond, the UK’s Competitions and Markets Authority is conducting an investigation into the cloud services market, which in September was extended by four months to enable the company due to the “nature and complexity of issues,” with specific attention drawn to licensing practices that were not previously examined during an Ofcom market study.

During the summer of 2024, Microsoft resolved another antitrust complaint with the European cloud providers association CISPE relating to the licensing of its cloud products, agreeing to a €20 million ($21.7m) deal.

In addition to paying the almost $22 million, Microsoft said it would develop a product – Azure Stack HCI for European cloud providers (Hosters) – that enables CISPE’s members to run Microsoft software on their platforms at equivalent prices to Microsoft’s.