According to sources, the US Federal Trade Commission (FTC) has launched an antitrust investigation into Microsoft, covering the company's cloud computing and software licensing business to cybersecurity and ai products.

Sources said that after more than a year of informal interviews with Microsoft's competitors and business partners, antitrust enforcement agencies have drawn up a detailed request for information from Microsoft. One source said FTC Chair Lina Khan signed this lengthy request, spanning hundreds of pages, and sent it to the company.

According to two other sources, FTC antitrust lawyers will meet with Microsoft's competitors next week to gather more information about Microsoft's business practices.

After a series of cybersecurity incidents involving Microsoft products, the US FTC has intensified its scrutiny of Microsoft's cloud computing business. The company is a top government contractor, providing billions of dollars worth of software and cloud services to US institutions, including the Department of Defense.

The request for information from Microsoft was a parting move by Lina Khan before leaving office. Previously, she led one of the most aggressive actions against corporate power consolidation in decades at the FTC. While business leaders hoped the election of President Trump would bring a more lenient regulatory era, the decision on how to handle this case will fall on his new FTC chair (not yet appointed).

The US FTC's investigation reexamines Microsoft's business practices over 25 years ago. At that time, the US government sued the company for behavior similar to bundling the Windows operating system and browser but failed to successfully break it up.

According to sources, a key focus of the current investigation is Microsoft tying its popular office productivity and security software with its cloud services.

According to these informants, Microsoft's cybersecurity errors, coupled with its importance as a government contractor, are seen by the FTC as an example of the company's problematic power in the market.

In a report in November 2023, the FTC emphasized concerns about the nature of concentration in the cloud market, meaning that "disruptions or other issues that reduce cloud provider services may have ripple effects on the economy or specific industries."

Earlier this year, CrowdStrike's breakdown affected millions of devices using Microsoft Windows systems, demonstrating the widespread use of the company's products and its direct impact on the global economy.

Some informants said that part of the investigation focuses on Microsoft's practices related to security software Microsoft Entra ID (formerly known as Azure Active Directory), which helps authenticate users logging into cloud software.

Competitors complain that Microsoft's licensing terms and the practice of bundling software with cloud services increase the competitive difficulty for authentication and cybersecurity companies.

Companies like Salesforce's Slack and Zoom Communications underbelonging assert that Microsoft's practice of bundling Teams video conferencing software with popular software like Word and Excel for free is anti-competitive and makes it harder for them to compete.