Microsoft faces broad antitrust investigation from U.S. FTC

After greater than a 12 months of conducting casual interviews with opponents and enterprise companions, antitrust enforcers have crafted an in depth request to drive Microsoft to show over info, in line with individuals conversant in the matter. The demand, which is a whole lot of pages lengthy, has been despatched to the corporate after FTC Chair Lina Khan signed off, mentioned one of many individuals.

FTC antitrust legal professionals are set to fulfill with Microsoft opponents subsequent week to assemble extra details about the Redmond, Washington-based firm’s enterprise practices, in line with two different individuals conversant in the plans who just like the others requested to not be named discussing a confidential matter. 

Microsoft and the FTC declined to remark.

The FTC’s scrutiny of Microsoft’s cloud computing enterprise gained steam after a string of cybersecurity incidents that concerned the corporate’s merchandise. The corporate is a prime authorities contractor, offering billions of {dollars} in software program and cloud companies to US businesses together with the Protection Division.

The Microsoft info demand is one in all Khan’s parting photographs as she steps down after helming one of the crucial aggressive pushes towards consolidated company energy the company has delivered in a long time. Whereas enterprise leaders are hoping that President-elect Donald Trump will usher in an period of lighter regulation, it would fall to his new FTC chair — nonetheless unnamed — to resolve the right way to proceed with the case.

The FTC inquiry renews scrutiny of Microsoft for its enterprise practices greater than 25 years after the federal government sued the corporate over related conduct involving bundling its Home windows working system and browser and unsuccessfully tried to interrupt it up.

A key focus of the present probe is Microsoft’s bundling of each its common workplace productiveness and safety software program with its cloud choices, in line with the individuals conversant in the knowledge request.  

Microsoft’s cybersecurity failings, mixed with its heft as a authorities contractor, are seen by the FTC for instance of the corporate’s problematic energy over the market, these individuals mentioned.

In a November 2023 report, the FTC highlighted considerations that the concentrated nature of the cloud market implies that “outages, or different points that degrade the service of a cloud supplier, might have a cascading affect on the economic system or particular sectors.”

The CrowdStrike crash that affected tens of millions of gadgets working on Microsoft Home windows methods earlier this 12 months was itself a testomony to the widespread use of the corporate’s merchandise and the way it straight impacts the worldwide economic system.

A portion of the probe is targeted on the corporate’s practices associated to safety software program known as Microsoft Entra ID — previously referred to as Azure Lively Listing — which helps authenticate customers logging in to cloud-based software program, a few of the individuals mentioned.

Opponents have complained that Microsoft’s licensing phrases and bundling of software program with cloud companies makes it more durable for rival authentication and cybersecurity firms to compete. 

Firms akin to Salesforce Inc.’s Slack and Zoom Communications Inc. have mentioned that Microsoft’s observe of making a gift of its Groups video-conferencing software program totally free in a bundle with common software program merchandise like Phrase and Excel is anticompetitive and makes it more durable for them to compete.

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