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Investigation against Microsoft: US trade authority criticises business practices

28.11.2024

Translation: machine translated

Microsoft's business practices in the areas of software licences, AI and cybersecurity services may be illegal. The company is now the subject of a major investigation for violating antitrust law. The Federal Trade Commission is also criticising a lack of security awareness.

The Federal Trade Commission (FTC) has launched an investigation into Microsoft. The focus is on violations of antitrust law, particularly in connection with software licences, cybersecurity services and cloud computing services. This was reported by Bloomberg with reference to several anonymous sources familiar with the matter. The portal The Verge also confirms this.

According to their information, the antitrust watchdogs have been conducting interviews in this context for over a year and have produced a document detailing what information Microsoft must hand over to the authorities. According to Bloomberg, the document comprises several hundred pages. Neither Microsoft nor the FTC want to make a statement in this context.

What exactly is at stake?

A key point of the investigation is the bundling of Microsoft's (Office) productivity and security software together with its cloud solution Azure. The investigation has gained momentum following several critical security incidents in recent years. For example, the disenabling of the master key for Microsoft's cloud environment by alleged Chinese hackers or the events surrounding "Crowdstrike".

Microsoft CEO Satya Nadella calls on his employees to be more security-conscious.
Source: Shutterstock

The US government's Cyber Safety Review Board subsequently came to the conclusion that Microsoft placed too little emphasis on security. This is also relevant for the investigating authorities, as Microsoft regularly receives contracts from the US government - including those that are relevant to national security and generate billions for the company. At the same time, the FTC fears that such security problems could have "cascading effects on the economy (...) if the cloud market becomes concentrated". Competitors and customers have also already complained that Microsoft's licence terms and software service bundling restrict free choice and are therefore anti-competitive. In this regard, the security software Entra ID - formerly Azure Active Directory - is being investigated by the FTC.

Already the fifth case against Microsoft

This is nothing new for the company from Redmond in Washington state. They were already confronted with an investigation in the 1990s. Back then, it was about the bundling of the Windows operating system with the Internet Explorer browser. This even ended in an anti-monopoly lawsuit by the Department of Justice.

In recent years, however, other companies have also been the focus of the US judiciary, such as Meta, Amazon, Apple and Google. Whether and how the situation will change when the FTC is back under Republican leadership is not yet clear. On the one hand, investigations by the DOJ (Department of Justice) - such as the one against Google - were already initiated during Donald Trump's first presidency. However, the President-elect recently spoke out against breaking up large tech companies in order to maintain US competitiveness.

Header image: Shutterstock

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Florian Bodoky

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Florian.Bodoky@digitecgalaxus.ch

I've been tinkering with digital networks ever since I found out how to activate both telephone channels on the ISDN card for greater bandwidth. As for the analogue variety, I've been doing that since I learned to talk. Though Winterthur is my adoptive home city, my heart still bleeds red and blue.

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Investigation against Microsoft: US trade authority criticises business practices

What exactly is at stake?

Already the fifth case against Microsoft

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