WASHINGTON – The U.S. Federal Trade Commission (FTC) is preparing to launch an investigation into Microsoft’s cloud computing business over concerns of anti-competitive practices, according to sources familiar with the matter.
The agency is examining allegations that Microsoft is potentially abusing its market power in productivity software by imposing punitive licensing terms to prevent customers from moving their data from the Azure cloud service to other competitive platforms, the sources told Reuters.
The Financial Times first reported on the FTC probe, stating that the tactics being examined include:
- Substantially increasing subscription fees for customers that leave Microsoft’s cloud
- Charging steep exit fees
- Making Microsoft Office 365 products incompatible with rival cloud platforms
Neither the FTC nor Microsoft immediately responded to requests for comment.
Concerns over Microsoft’s Cloud Dominance The investigation reflects growing regulatory scrutiny over the tech giant’s dominance in the cloud computing market, where its Azure platform competes with offerings from Amazon, Google, and others.
Critics argue that Microsoft is leveraging its market power in productivity software like Office 365 to lock customers into its Azure cloud, hindering competition.
The FTC’s probe comes as Microsoft has been rapidly growing its cloud business, which has become a key revenue driver for the company. Azure revenue grew 35% year-over-year in the most recent quarter.
Regulatory Environment Tightens The potential investigation underscores the increasingly tough regulatory environment facing major tech firms in the United States.
Earlier this year, the FTC filed a lawsuit seeking to block Microsoft’s planned $68.7 billion acquisition of Activision Blizzard, arguing it would give the company an unfair advantage in the video game market.
Antitrust authorities have also been examining the market power of other tech giants like Amazon, Apple, and Google in recent years, leading to a spate of lawsuits and investigations.
The FTC’s scrutiny of Microsoft’s cloud computing practices reflects the broader concern that dominant tech platforms may be stifling competition through exclusionary tactics. The outcome of this probe could have significant implications for the future of the cloud computing industry.
Source: Reuters
