WASHINGTON, D.C. — The Federal Trade Commission (FTC) sent civil investigative demands (CIDs) to at least half a dozen companies that compete with Microsoft as part of an antitrust investigation into the company’s cloud and AI business practices. The probe, which began in 2024 under the Biden administration and has continued into the current presidential term, focuses on whether Microsoft has engaged in exclusionary behavior related to its Azure cloud services and AI offerings.
The CIDs state the FTC’s aim is to determine if Microsoft has used unfair methods of competition in its cloud, software products, and related services in violation of the FTC Act, according to an industry source who reviewed the documents. The demands include more than 15 pages of questions covering bundling strategies, pricing, discounting, profitability, and barriers to market entry. The FTC also seeks information on how Microsoft’s policies and market position affect competition, particularly in AI, where companies may combine additional features or services with products like Microsoft 365.
Microsoft spokesperson Alex Haurek said the company is “cooperating fully with the FTC and believe our practices promote competition while delivering the innovative products our customers expect.” He added that the cloud sector “has never been more dynamic and competitive,” pointing to Google as “a clear example of that dynamic—growing 63% year over year and competing head-to-head with other major providers including AWS, the largest cloud provider.”
In 2023, Google responded to a broad FTC inquiry about business practices in the cloud computing industry by accusing Microsoft of using dominance in other areas to “give their own cloud products an unearned advantage” and lock in consumers. Separately, customers have complained that Microsoft’s 2019 changes to its licensing terms made it significantly more costly to run Windows software on infrastructure outside of Microsoft’s Azure cloud.
George Washington University law professor and former FTC Chair William Kovacic said the references to AI in the CIDs could indicate the agency is examining whether Microsoft’s practices constitute an illegal tying arrangement or confer an unfair competitive edge. He noted that as a $3 trillion company, it is “almost inevitable” for Microsoft to attract third-party antitrust complaints.
Microsoft is also cooperating with separate investigations into its cloud services by the European Commission, U.K. Competition and Markets Authority, and Japan Fair Trade Commission. Haurek said the company is “committed to working quickly and constructively with the CMA” on its review and is also cooperating with the investigations in Europe and in Japan.