FTC widens Microsoft probe

The Federal Trade Commission’s Microsoft investigation has widened beyond earlier questions about software licensing and now reaches into cloud contracts, AI products and software bundling, according to recent reports. Network World reported on June 1 that regulators are examining whether Microsoft’s licensing, interoperability and default product ties make it harder for enterprise customers to switch vendors. The probe adds AI components to a case that had already focused on Microsoft’s position in business software and cloud computing. The FTC has not announced a formal complaint, and Microsoft has not been charged with wrongdoing. ### Which Microsoft practices are now under scrutiny? Network World reported that investigators are looking at cloud, AI and software bundling together rather than as separate product areas. The questions described in the report cover licensing rules, interoperability limits, default software ties and other practices that could increase switching costs for large customers. (networkworld.com) The February phase of the inquiry was already examining whether Microsoft bundled AI, security and identity software into products including Windows and Office, and whether its licensing terms made it harder or more expensive to run Microsoft software on rival clouds. That earlier reporting said the FTC had begun issuing civil investigative demands to companies competing with Microsoft in business software and cloud markets. (networkworld.com) ### Why are cloud contracts and interoperability central to the case? Microsoft’s enterprise business spans Azure cloud infrastructure, Office applications, Windows, security tools and Copilot AI services. Regulators appear to be testing whether those products reinforce one another in ways that disadvantage rivals when customers try to move workloads, data or software licenses elsewhere, according to the reporting. (networkworld.com) The FTC’s interest in interoperability matters because it goes beyond price. If investigators are asking how easily customers can shift software, data and workflows to competing platforms, the inquiry reaches into technical and contractual barriers as well as product packaging. That is an inference from the reported scope of the demands and the issues named in the coverage. (networkworld.com) ### How far along is the FTC’s investigation? The FTC launched its broader Microsoft investigation in November 2024, according to Network World’s earlier report, and sought about a decade of company data covering 2016 through 2025. By February 2026, the agency had begun sending civil investigative demands to at least a half-dozen competing companies, seeking information before any formal complaint or lawsuit. (networkworld.com) Civil investigative demands are subpoena-like tools used in civil probes. Their use does not mean the FTC will sue, but it does show the agency is collecting evidence from outside Microsoft as well as from the company itself. ### What has Microsoft said? Microsoft says on its legal site that it is “committed to the highest standards of business ethics, including fair competition and compliance with antitrust laws.” The company’s antitrust page does not address the current FTC probe directly. (networkworld.com) The February Network World report also said Microsoft had pushed back on claims about its practices and had made some policy changes after complaints in multiple markets. (networkworld.com) That report did not say those changes ended the FTC inquiry. ### What would show the probe is moving into a new phase? The FTC’s next visible step would be a complaint, a settlement, or a public filing in the agency’s cases-and-proceedings system. (microsoft.com) Microsoft disclosures, court filings, or statements from named competitors could also show whether the investigation is turning into litigation or negotiated remedies. (ftc.gov) (networkworld.com)