The U.S. Federal Trade Commission (FTC) has intensified its antitrust investigation into Microsoft, focusing on the company’s artificial intelligence (AI) partnerships and cloud computing practices, according to Bloomberg.
The probe, initiated during the Biden administration, has intensified under the leadership of FTC Chair Andrew Ferguson, appointed by President Donald Trump. The investigation scrutinizes allegations of Microsoft’s potential market power abuse in productivity software, cloud services, and its strategic alliances in the AI sector.
Microsoft’s AI Partnerships Under Scrutiny
A central aspect of the FTC’s investigation is Microsoft’s partnership with OpenAI. In 2019, Microsoft began investing billions into OpenAI, providing an Azure-based supercomputing platform for its operations.
This collaboration granted Microsoft exclusive access to OpenAI’s GPT-3 language model in September 2020. The FTC is examining whether this exclusive access has provided Microsoft with an unfair competitive advantage in the AI market.
The FTC is also investigating Microsoft’s software licensing terms, particularly allegations that the company imposes punitive conditions to deter customers from migrating from its Azure cloud service to competing platforms.
Microsoft has increased subscription fees for customers attempting to leave Azure and has implemented high exit fees, potentially hindering fair competition in the cloud services market.
The trajectory of the FTC’s investigation may be influenced by the current political environment. With the Trump administration’s pro-business stance, there is speculation that regulatory scrutiny of major tech companies like Microsoft could diminish. However, the FTC’s ongoing efforts show a commitment to addressing potential anticompetitive practices in the technology sector.
As the probe progresses, its outcomes could have significant implications for Microsoft’s business strategies and the broader dynamics of competition within the tech industry.
