The U.S. Federal Trade Commission (FTC) has launched an investigation into Microsoft’s business practices in its cloud division, explicitly targeting its Azure service. This move comes as the Biden administration steps up its scrutiny of major tech companies. Could this new FTC probe put Azure at risk? Let’s break down what’s happening.
FTC Investigates Microsoft’s Cloud Practices
The FTC is looking into claims that Microsoft is using its dominant position in the productivity software market to unfairly restrict competition. Allegations include imposing restrictive licensing terms that make it harder for customers to switch their data from Azure to other cloud platforms. The tactics under investigation reportedly involve steep increases in subscription fees for those wanting to leave the service, high exit fees, and compatibility issues between Office 365 products and rival cloud services.
This inquiry is part of a broader effort led by FTC Chair Lina Khan to curb the monopolistic power of tech giants like Meta and Amazon. Khan, known for her aggressive approach against monopolies, is set to be replaced when president-elect Donald Trump takes office soon. While her successor might adopt a less confrontational approach, it’s likely the focus on Big Tech’s practices will continue, as the issue has bipartisan support in Washington.
The decision to formally investigate followed a public call for feedback from industry participants and users about the business practices of cloud providers. The responses revealed widespread concerns about anti-competitive behaviors, including restrictive software licensing that limits users’ ability to run certain programs on other cloud platforms.
It remains to be seen whether Microsoft will make changes to address the key issues flagged by the FTC. There’s also speculation on whether Amazon Web Services (AWS) might face similar scrutiny due to its strong market position, or if Jeff Bezos’ company has managed to avoid the same pitfalls.
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