FTC expands Microsoft probe to cloud

The Federal Trade Commission has widened its antitrust investigation of Microsoft to cover cloud computing, artificial intelligence and software bundling, according to reports published on June 1. The expanded probe adds to an inquiry that began in November 2024 and now reaches deeper into how Microsoft licenses software, packages products and structures interoperability for enterprise customers. The agency has issued civil investigative demands, or CIDs, to more than a half-dozen companies that compete with Microsoft in business software and cloud computing, according to CIO and Network World. Microsoft and the FTC have declined to comment publicly on the investigation. ### What exactly is the FTC asking about? The FTC is examining whether Microsoft’s licensing terms and technical practices make it harder for customers to run Windows, Office and related products on rival cloud platforms, according to the June 1 reports. Investigators are also seeking information on interoperability and on product bundles that could make it more expensive or more difficult for enterprise customers to switch vendors. (networkworld.com) CIO reported earlier this year that the agency was also asking about Microsoft’s bundling of AI, security and identity software into products including Windows and Office. Bloomberg Law reported in February that the inquiry covered Microsoft’s cloud software and AI offerings, including Copilot, as the FTC tested whether the company was monopolizing parts of the enterprise computing market. (networkworld.com) ### Why do licensing terms matter so much in cloud? Microsoft’s software remains deeply embedded in corporate computing. In its 2025 annual report, the company said it generates revenue from cloud-based services as well as from licensing and supporting software products, and it reported continued growth in Microsoft 365 Commercial cloud revenue. That makes licensing terms a central part of how customers buy, deploy and move workloads. (cio.com) European cloud providers have been fighting Microsoft over those terms for years. CISPE, a trade group for cloud infrastructure providers in Europe, said in a 2024 settlement announcement that Microsoft agreed to steps on fair software licensing and to the creation of a European Cloud Observatory to monitor implementation. In July 2025, CISPE and Microsoft revised that arrangement with new commercial terms after an earlier technical solution fell short, according to Data Center Dynamics. (microsoft.com) ### Where does AI fit into an antitrust case built around enterprise software? Copilot and other AI services appear to have pulled the probe into newer markets. Bloomberg Law reported that the FTC was scrutinizing Microsoft’s AI offerings alongside its cloud software, while CIO said investigators were asking whether Microsoft bundled AI, security and identity tools into core products. Those questions matter because enterprise customers often buy AI tools through the same contracts and platforms they already use for productivity software and cloud infrastructure. (cispe.cloud) The June 1 reports did not say the FTC had reached any conclusions. They described a fact-gathering phase centered on how Microsoft’s existing position in workplace software and cloud services may affect competition in adjacent markets, including AI. ### Is this already a lawsuit? No complaint has been filed. Civil investigative demands are subpoena-like requests used in civil investigations, and they often precede enforcement decisions but do not guarantee one, CIO and Network World reported. (news.bloomberglaw.com) The current stage is closer to evidence collection than to litigation. The February reporting said FTC staff were gathering information from rivals and testing complaints that had surfaced from customers and competitors. (networkworld.com) Bloomberg Law also reported that Microsoft had already made some policy changes intended to loosen licensing restrictions, particularly for smaller European cloud providers, and had reached an agreement with a European trade group. (cio.com) ### What should readers watch next? FTC staff will next review responses from Microsoft and competing companies, including material on licensing, interoperability and bundling. If the agency decides to proceed, that process could lead to a formal complaint or lawsuit, but the June 1 and February reports said no such action had been announced. Microsoft’s cloud and productivity disclosures in future securities filings, along with any new FTC court filing or public statement, are the clearest places to watch for the next concrete step. (news.bloomberglaw.com) (networkworld.com)