The Federal Trade Commission (FTC) has initiated an investigation into Microsoft’s cloud computing business, focusing on potentially unfair business practices. At the heart of the probe is whether Microsoft has been leveraging its significant market position by enforcing stringent licensing terms that impede the migration of customer data from their Azure cloud service. Concerns extend to notable price hikes for subscription cancellations, exit penalties, and claims of incompatibility issues between Microsoft’s Office 365 and other cloud services. This move by the FTC comes on the heels of a public request for commentary on cloud provider practices, where complaints about restrictive software licensing and high data transfer fees proved prominent. On a global scale, Microsoft commands a 20% share of the cloud market, placing it behind Amazon Web Services at 31% but ahead of Google Cloud at 12%.
International Scrutiny and Regulatory Challenges
The investigation aligns with FTC Chair Lina Khan’s vigilant stance on big tech companies during the closing weeks of the Biden administration. This scrutiny is not limited to the United States; similar concerns are evident internationally, with the UK’s Competition and Markets Authority also reviewing customer lock-in tactics employed by Microsoft and Amazon. This isn’t the first time Microsoft has faced such scrutiny; previously, they settled with European cloud providers in an effort to prevent formal investigations. The probe encapsulates the broader regulatory challenges and market implications surrounding Microsoft’s cloud business practices, as regulators worldwide seek to address potential anti-competitive behaviors. It remains to be seen how Microsoft will respond to these growing investigations and whether any substantial changes to its business practices will be necessitated by regulatory pressure.
