The Federal Trade Commission is readying an investigation into Microsoft’s cloud-computing business as its full-throttle approach to antitrust continues in the final weeks of the Biden administration, according to a report.
The agency led by Chair Lina Khan is looking into claims that the company is abusing its market clout by enforcing terms that prevent users from moving their data from its Azure service to other cloud-computing software, people with direct knowledge of the matter told the Financial Times.
Microsoft has allegedly been hiking subscription fees for those that are leaving the platform, charging sky-high exit fees and making its Office 365 products incompatible with other cloud services, the report said.
The regulatory agency has yet to request documents or information from Microsoft, sources told the Financial Times.
The FTC and Microsoft declined to comment.
The planned investigation is just the FTC’s latest crackdown on Big Tech under Khan, though “she will be fired soon,” according to Trump ally and billionaire X owner Elon Musk.
Khan has led a tough regime at the helm of the FTC since President Joe Biden appointed her in 2021.
During her tenure, the agency has killed mergers at Nvidia and Lockheed Martin and accused Meta of operating as a monopoly. The commission has fought to block Microsoft’s $69 billion deal with video game maker Activision Blizzard and grocery store Kroger’s planned $25 billion merger with Albertsons.
Republicans have taken issue with Khan’s aggressive approach on top Silicon Valley companies. President-elect Donald Trump has vowed to curb the “regulatory onslaught” from government agencies like the FTC.
In November 2023, after seeking input from business bigwigs and academics, the FTC published findings on competition and security practices in the cloud computing industry.
And the report cited many of the same grievances allegedly being committed by Microsoft: hefty exit fees, software licensing practices that discourage the use of other platforms and extreme “lock-in” discounts for customers who use just one cloud service.
Microsoft has faced increased scrutiny from international regulators, as well.
In April, UK regulators said they were investigating recent separate artificial intelligence deals by Microsoft and Amazon over concerns the partnerships would crush competition.
In July, the Washington-based software company signed a $21 million deal with CISPE, a smaller European cloud service provider, to avoid an EU antitrust investigation.
Cloud services has grown into an incredibly lucrative business for tech companies. Spending on cloud services reached $561 billion in 2023 and is expected to top $675 billion this year – with 20% growth in the sector thanks to generative AI expansion, according to market research firm Gartner.
Microsoft controls roughly 20% of the cloud computing market, behind leader Amazon’s 31% market share, according to Statista.
Google trails far behind in third place with an 11% share of the market, Statista said.
It’s an ultra-competitive sector, and Microsoft has accused Google of playing dirty in the past.
Last month, Microsoft accused Google of running “shadow campaigns” to slander the company’s name among regulators.
In July, reports alleged Google had made a counteroffer to CISPE – the European cloud service provider that Microsoft settled with – in a failed attempt to convince them to pursue their complaint against Microsoft.
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