The US Federal Trade Commission has initiated an antitrust investigation into Microsoft regarding its software licensing and cloud computing businesses, reported Reuters on Wednesday quoting a source familiar with the matter.

The FTC is examining allegations that the software giant is potentially abusing its market power by imposing punitive licensing terms to prevent customers from moving their data from its Azure cloud service to other competitive platforms, as well as practices related to cybersecurity and artificial intelligence, according to Reuters' source.

Last year, the FTC noticed Microsoft as it examined the cloud computing market.

NetChoice, a lobbying group that represents online companies including Amazon and Google, which compete with Microsoft in cloud computing, criticised Microsoft's licensing policies, and its integration of AI tools into MS Office and Outlook.

The group said Microsoft is the world's largest software company which has dominated the operating system, therefore, the scale and consequences of its licensing decisions are extraordinary.

Earlier on Wednesday, Bloomberg also reported that the FTC has demanded a broad range of detailed information from Microsoft.