FTC Ramps Up Scrutiny of Microsoft’s AI & Cloud Practices as Rival Firms Receive Information Requests

Key Takeaways

• Expanded Information Requests: The U.S. Federal Trade Commission has sent civil investigative demands to at least half a dozen Microsoft competitors in enterprise software and cloud computing markets, according to Bloomberg.
• AI and Software Bundling Under Review: The agency is seeking information about Microsoft’s integration of AI, security, and identity tools into its broader offerings.
• Ongoing Licensing Scrutiny: The move builds on a 2024 investigation launched under former FTC Chair Lina Khan into whether Microsoft imposed restrictive licensing terms tied to its productivity software and cloud services.
• Cloud Lock-In Concerns: Competitors have alleged that Microsoft’s licensing structure reinforces customer reliance on its Azure cloud platform.

Deep Dive

The U.S. Federal Trade Commission is intensifying its review of Microsoft, broadening its inquiry into the company’s licensing structure, cloud strategy, and integration of artificial intelligence tools, according to a report by Bloomberg News.

The regulator has recently issued civil investigative demands to several of Microsoft’s competitors in enterprise software and cloud computing markets, the report said, citing people familiar with the matter. At least half a dozen companies have reportedly received formal requests for information.

The expanded inquiry is said to focus in part on how Microsoft packages AI capabilities, security tools, and identity management software within its broader offerings. The FTC is seeking details about whether these integrations may affect competition in the cloud and enterprise software markets.

Ongoing Concerns Over Licensing and Cloud Lock-In

The latest developments build on an investigation opened in 2024 under then-FTC Chair Lina Khan, which examined whether Microsoft used its position in productivity software to impose restrictive licensing terms. That earlier probe centered on whether such terms discouraged customers from transferring data to competing cloud platforms.

Rivals have long argued that Microsoft’s licensing structure and product design create barriers to switching away from its Azure cloud infrastructure. Critics contend that these practices effectively reinforce customer dependence on the company’s ecosystem.

The scrutiny is unfolding amid heightened global regulatory attention on major technology companies’ use of market power in emerging AI and cloud markets.

The FTC’s latest information requests shows that U.S. regulators are continuing to examine how established technology platforms are positioning themselves in the fast-evolving AI and cloud infrastructure landscape.

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