US FTC Intensifies Scrutiny of Microsoft’s AI Operations and Licensing Practices
The Federal Trade Commission (FTC), under the leadership of Trump-appointed Chair Andrew Ferguson, is continuing its antitrust investigation into Microsoft’s business practices. The probe is specifically targeting the company’s artificial intelligence (AI) operations, cloud computing services, and software licensing. This ongoing investigation assesses potential anti-competitive tactics within the technology sector, including Microsoft’s relationship with OpenAI and its data center capacity limitations.
The FTC’s renewed investigation into Microsoft reportedly began during the final days of the Biden administration, suggesting that the scrutiny of major technology companies will be maintained by the new FTC leadership.
FTC staff have been actively gathering information in recent weeks by meeting with various companies and groups involved. The agency issued a civil investigative demand to Microsoft late last year, requesting extensive data on its AI operations, cloud computing business, and software licensing practices. The investigation is partly focused on Microsoft’s licensing terms, which competitors claim make it challenging for customers to switch from Azure cloud services to rival platforms.
Moreover, the FTC is examining Microsoft’s decision to decrease funding for its internal AI projects after investing in OpenAI. This move could potentially damage competition in the quickly expanding AI market. “We are working cooperatively with the agency,” stated Alex Haurek, a Microsoft spokesman.
Ferguson, who assumed the role of FTC chair in January, emphasized that investigating the tech sector is his top priority in his opening public remarks. He previously supported a legal filing backing Elon Musk’s lawsuit regarding OpenAI’s restructuring plans.
The probe is additionally scrutinizing Microsoft’s data center capacity constraints to better understand cloud computing costs. The FTC is investigating whether profits from other aspects of Microsoft’s business provide an unfair advantage over its AI competitors. The FTC is also seeking information about licensing rule changes Microsoft plans to implement later this year and has been investigating whether Microsoft’s partnership with OpenAI was structured to avoid a merger investigation. The investigation is expected to take years and may not necessarily result in any legal action.
