Federal Investigation Targets Microsoft Over Alleged Cloud Computing Issues

The Federal Trade Commission (FTC) is launching an investigation into Microsoft’s cloud computing business, amid concerns that the company may be engaging in unfair business practices. This marks another significant regulatory challenge for the tech giant.

The investigation will look into whether Microsoft abused its market dominance by putting harsh licensing terms in place that make it impossible for customers to move their data from Microsoft’s Azure cloud service, according to The Financial Times, citing informed sources.

Additionally, the inquiry will concentrate on various alleged methods, including hefty subscription rate increases for users attempting to quit the platform, significant departure penalties, and charges that Microsoft rendered its Office 365 products incompatible with other cloud services.

The FTC took this action after asking the public to comment on the business practices of cloud providers last year. People who responded were worried about cloud providers’ strict software licensing and high data transfer fees.

Moreover, the Financial Times reported that Microsoft has about 20% of the world cloud market share, which puts it second—after Amazon Web Services, which has 31%—and ahead of Google Cloud, which has 12%.

The investigation starts in the last few weeks of the Biden administration, at a time when FTC Chair Lina Khan is still keeping a close eye on big tech companies. Khan’s term will likely end next year when President-elect Trump takes office.

In other countries, Microsoft has also been closely looked at. Microsoft and Amazon are both being looked into by the UK’s Competition and Markets Authority because they are worried about customer lock-in. In July, Microsoft made a multimillion-dollar settlement with European cloud providers to avoid a formal investigation in those countries.