FTC broadens Microsoft probe

The Federal Trade Commission has widened its antitrust investigation of Microsoft to include cloud services, AI products and software bundling, according to reports published June 1 by Network World and CIO. The inquiry is examining whether Microsoft’s licensing terms, product interoperability and packaging of software make it harder for enterprise customers to move workloads or contracts to rivals. (networkworld.com) The reports said the agency has been gathering information on Microsoft’s business agreements and the way products such as Windows, Office and Microsoft 365 are tied to other services. The probe adds to a case that began in November 2024 and has expanded through 2026. ### Which Microsoft practices are drawing questions from regulators? The FTC is asking about Microsoft’s licensing arrangements, interoperability and bundling of AI, security and software products, including Windows and Office, according to Network World and CIO. (networkworld.com) The reports said investigators are examining whether those practices make it difficult, expensive or nearly impossible for customers to run Microsoft software on competing cloud infrastructure. The June 1 reports said regulators are also seeking information on Microsoft’s business agreements and the interaction among its products. Those questions reach beyond traditional software packaging and into how enterprise customers buy, deploy and maintain cloud and AI services across vendors. (networkworld.com) ### How far along is the FTC investigation? November 2024 was the starting point for the FTC probe, according to the June 1 reports. Earlier this year, the agency stepped up the inquiry by issuing civil investigative demands, or CIDs, to more than a half dozen competitors in business software and cloud computing. Bloomberg reported on February 13 that the FTC had sent those demands to companies competing with Microsoft in cloud and business software markets. (networkworld.com) The demands asked about licensing and other business practices as part of an investigation into whether Microsoft was monopolizing broad parts of enterprise computing with its cloud and AI offerings, including Copilot, Bloomberg said. ### What are the civil investigative demands asking rivals to provide? The FTC’s civil investigative demands contain more than 15 questions in some cases, Network World and CIO reported. The requests seek material on Microsoft’s licensing and other business practices, as well as competitors’ organizational charts, product roadmaps, marketing strategies, pricing, discounting and profitability. (networkworld.com) Those requests also ask about barriers to entry and expansion in markets where Microsoft is strong, the reports said. Regulators are seeking documents that show the effect of Microsoft’s policies, bundling and interoperability practices on competition. ### Why are AI products part of the case now? (bloomberg.com) The FTC is seeking information on industry AI offerings, including the addition of extra features and services to long-established products such as Microsoft 365, according to the June 1 reports. Bloomberg said in February that the agency’s scrutiny covered Microsoft’s cloud software and AI offerings, including Copilot. Network World and CIO also reported that the agency has been scrutinizing Microsoft’s data centers, capacity constraints, and AI research and spending. (networkworld.com) Microsoft, in its April 29 quarterly earnings release, said revenue for the quarter ended March 31 was $82.9 billion and quoted Chief Executive Satya Nadella as saying the company was focused on delivering cloud and AI infrastructure and solutions. ### Has the FTC said publicly that it will sue Microsoft? The FTC has not announced a public enforcement action against Microsoft on its press releases page as of June 3. Network World and CIO said civil investigative demands typically, but not always, precede formal complaints or lawsuits. Microsoft’s public antitrust page says the company is committed to fair competition and compliance with antitrust laws. (networkworld.com) The company’s investor and legal pages reviewed did not show a specific public statement on the expanded FTC probe. ### What happens next for Microsoft and its rivals? The immediate next phase is continued document collection from competitors and other market participants through the FTC’s civil investigative demands. The June 1 reports said the agency is still gathering evidence on bundling, pricing, interoperability and AI-related offerings tied to products such as Microsoft 365, Windows, Office and Azure. (networkworld.com) June 3 leaves the investigation in an evidence-gathering stage rather than a filed case. Any formal complaint, settlement or court challenge would come only after the FTC finishes reviewing the material it has sought from Microsoft’s rivals and the broader enterprise software and cloud markets. (ftc.gov) (networkworld.com) (microsoft.com)