FTC Set to Probe Microsoft’s Cloud Practices

Microsoft’s stock (NASDAQ: MSFT) was a rare gainer on the Nasdaq yesterday, adding 0.40% as the index fell by 0.66%, but the news on the day was not all positive.

The U.S. Federal Trade Commission (FTC) is reportedly gearing up for an antitrust investigation into the cloud business of tech giant Microsoft Corporation.

At the heart of the FTC’s concerns are allegations that Microsoft is leveraging its dominant position in the cloud market to engage in anti-competitive practices. Specifically, the investigation is set to focus on Microsoft’s licensing terms which are claimed to limit customers’ ability to move data away from its Azure cloud services to rival platforms.

The investigation will also examine complaints about steep exit fees imposed on clients who choose to transfer their operations out of Microsoft’s cloud ecosystem. Additionally, subscription fees are under the microscope, with the FTC probing into the potential hikes for users who move to a competitor’s service.

Another critical area of the FTC’s inquiry will revolve around the compatibility of the Office 365 suite of productivity applications. There is growing concern that Microsoft is intentionally engineering these products to perform sub optimally on platforms that compete with Azure, consequently skirting the boundaries of fair competition.

The heightened regulatory focus is not limited to Microsoft alone. Other prominent technology companies, such as Meta Platforms, Apple, Amazon, and Alphabet (the parent company of Google), are also facing increased scrutiny as regulators globally are cracking down on what they perceive to be monopolistic tactics.

While the FTC’s investigation might pose some headwinds, Microsoft’s robust financial position and strategic market moves position it as a vigilant player ready to adapt to the changing tides in the competitive world of cloud computing and corporate software solutions.