The Federal Trade Commission (FTC) is poised to initiate an investigation into Microsoft’s cloud computing practices, examining potential anti-competitive behaviour in a move that signals continued regulatory pressure on Big Tech during the final phase of the Biden administration.
At the heart of the investigation are allegations that Microsoft is wielding its market dominance in productivity software to implement punitive licensing terms, effectively preventing customers from migrating their data from its Azure cloud service to rival platforms. The scrutiny extends to claims of substantial subscription fee increases for departing customers, hefty exit fees, and alleged intentional incompatibility between Office 365 products and competing cloud services.
The investigation emerges as part of FTC Chair Lina Khan’s broader campaign to curtail monopolistic tendencies among technology giants. While formal document requests have not yet been issued to Microsoft, the investigation follows the FTC’s earlier public consultation, which revealed widespread competition concerns within the cloud computing sector.
Microsoft currently commands approximately 20% of the global cloud market, positioning it behind Amazon Web Services’ 31% share but significantly ahead of Google Cloud’s 12%. The cloud services industry has experienced remarkable growth, reaching £561 billion in 2023, with projections indicating expansion to £675 billion in 2024 and £825 billion by 2025.
The regulatory spotlight on Microsoft’s cloud practices extends beyond US borders, with both UK and EU authorities addressing similar concerns. The UK’s Competition and Markets Authority is conducting its own investigation into market practices, while Microsoft recently avoided formal EU scrutiny through a multimillion-dollar settlement with rival cloud providers.
This latest regulatory action follows the FTC’s previous attempt to block Microsoft’s £75 billion acquisition of Activision Blizzard, highlighting the agency’s sustained focus on maintaining competition within the technology sector. The timing of this investigation becomes particularly significant as the US approaches a presidential transition, raising questions about the future direction of tech industry oversight.
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