US antitrust watchdog launches broad Microsoft investigation

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The US Federal Trade Commission has opened an antitrust investigation of Microsoft Corp., drilling into everything from the company’s cloud computing and software licensing businesses to cybersecurity offerings and artificial intelligence products.

After more than a year of conducting informal interviews with competitors and business partners, antitrust enforcers have crafted a detailed request to force Microsoft to turn over information, according to people familiar with the matter. The demand, which is hundreds of pages long, has been sent to the company after FTC Chair Lina Khan signed off, said one of the people.

A Microsoft store in New York

Photographer: Jeenah Moon/Bloomberg

FTC antitrust lawyers are set to meet with Microsoft competitors next week to gather more information about the Redmond, Washington-based company’s business practices, according to two other people familiar with the plans who like the others asked not to be named discussing a confidential matter.

Microsoft and the FTC declined to comment.

The FTC’s scrutiny of Microsoft’s cloud computing business gained steam after a string of cybersecurity incidents that involved the company’s products. The company is a top government contractor, providing billions of dollars in software and cloud services to US agencies including the Defense Department.

The Microsoft information demand is one of Khan’s parting shots as she steps down after helming one of the most aggressive pushes against consolidated corporate power the agency has delivered in decades. While business leaders are hoping that President-elect Donald Trump will usher in an era of lighter regulation, it will fall to his new FTC chair — still unnamed — to decide how to proceed with the case.

Read more: Lina Khan Has Plenty More Targets—If She Gets Another Term

The FTC inquiry renews scrutiny of Microsoft for its business practices more than 25 years after the government sued the company over similar conduct involving bundling its Windows operating system and browser and unsuccessfully tried to break it up.

A key focus of the current probe is Microsoft’s bundling of both its popular office productivity and security software with its cloud offerings, according to the people familiar with the information request.

Microsoft’s cybersecurity failings, combined with its heft as a government contractor, are seen by the FTC as an example of the company’s problematic power … Read More