The Federal Trade Commission (FTC) is preparing to launch a heavy blow to the cloud computing business of US tech giant Microsoft and investigate its anti competitive behavior. In the last few weeks of President Joe Biden's term, the current chairman of this US regulatory agency is urgently investigating large tech companies.
According to sources with direct knowledge of the matter, the FTC is investigating allegations that Microsoft used unfair licensing terms to lock in customers and control the cloud computing market.
According to the allegations, Microsoft has "trapped" a large number of customers in Azure cloud infrastructure products through its dominant Windows Server and Microsoft Office products, making it difficult to convert them to other competitors' cloud products (conversion requires high fees, but in reality there are no technical barriers to doing so).
The FTC has launched an investigation into this matter. The terms currently under review by the agency include charging high exit fees, significantly increasing subscription fees for those who leave, and incompatibility between its Office 365 product and competing cloud products.
Insiders also pointed out that as part of the investigation, the FTC has not formally requested Microsoft to provide documents or other information.
New Strike
The move to challenge Microsoft's cloud business marks the latest round of crackdown by FTC Chairman Lina Khan on large tech companies. During her tenure, she was committed to curbing the monopoly power of large tech companies such as Meta and Amazon, and was known for her tough approach.
In the Wall Street trading world, Lena Khan has become the public enemy of most traders. However, it is expected that Lena Khan's position will be replaced by someone else after President Donald Trump takes office next year.
Although the next FTC chairman may not take a tough stance like Lena Khan, it is expected that large tech companies will still be at the forefront. This is because the FTC solicited feedback from industry participants and the public last year regarding the business practices of cloud computing service providers. The survey results showed that most of the feedback expressed concerns about market competition, including software licensing practices that restrict the use of certain software capabilities in other cloud provider ecosystems.
In addition to the FTC, Microsoft's terms on cloud business have also been closely monitored by international regulatory agencies.
Among them, the UK Competition and Markets Authority (CMA) is conducting investigations into Microsoft and Amazon. Previously, an investigation by the UK's Office for Communications (Ofcom) found that Amazon and Microsoft's cloud services could disrupt market competition, with customers complaining of being "locked in" to these cloud providers' services, who offer exclusive discounts for their own cloud services but charge high migration fees for data migrated from the cloud.
In the European Union, Microsoft successfully reached a multi million dollar agreement with CISPE, the European cloud computing industry trade body, in July this year, thus avoiding formal investigations by EU regulatory agencies into its cloud business.