FTC opens antitrust investigation into Microsoft’s cloud, AI, and cybersecurity practices

Focus on market dominance and security practices

The investigation centers on Microsoft’s bundling of office productivity and security software with its cloud services, a practice critics argue disadvantages competitors in the authentication and cybersecurity markets. The FTC is particularly examining Microsoft Entra ID, its user authentication service, amid complaints that licensing terms and integration with its cloud offerings impede rival companies.

Microsoft’s role as a major government contractor and recent cybersecurity incidents involving its products have added urgency to the probe. The company provides billions of dollars in services to US agencies, including the Department of Defense, making its practices critical to national security.

In November 2023, FTC flagged concerns about the concentrated nature of the cloud market, warning that outages or performance issues could ripple through the economy. The authority had then collected feedback from civil society, industry stakeholders, and academia to prepare its report. As per the feedback, the majority of the concerns were related to competition and licensing practices.