Last hurrah for chair Lina Khan? Federal Trade Commission launches sweeping investigation into Microsoft before Trump handover
Microsoft is facing another antitrust investigation, in what could be one of the last acts of FTC Chair Lina Khan ahead of her likely departure in January, when Donald Trump assumes office.
CNN reported that the Federal Trade Commission (FTC) is launching a ‘sweeping investigation’ into the Microsoft’s practices.
It comes after reports earlier this month the FTC was preparing to launch an investigation into Microsoft’s cloud computing business.
FTC investigation
However this ‘wide ranging’ probe was first reported this week by Bloomberg.
A source familiar with the matter told CNN that the FTC has sent a letter (or a “detailed information demand”) to Microsoft, which reportedly demanded that Redmond hand over information to assist in the agency’s investigation.
Both the FTC and Microsoft declined to comment, and so far nothing has been published by the FTC about the probe, as of Thursday morning.
But the FTC investigation is reportedly asking questions that focus on software licensing, cybersecurity, and AI.
Of course Microsoft is one of the most valuable companies in the world and consequentially has a wide-ranging business model that covers cloud computing, the emerging artificial intelligence (AI) space, enterprise software (Office suites, operating systems etc), gaming, and even has its own device division (Surface laptops etc).
Other antitrust issues
Microsoft of course is no stranger to antitrust concerns or investigations.
On this side of the pond for example, Microsoft has European officials concerned about its partnership with OpenAI (Microsoft has invested up to $13 billion into OpenAI), which allows Redmond to utilise the AI technology for its Copilot chatbot, as well as its Azure cloud service.
These concerns are part of a wider effort to assess competition in the AI field. However an official investigation has not yet been announced.
Microsoft is also facing European concerns about bundling its Teams video app with Office suite. The EC in June 2024 “informed Microsoft of its preliminary view that Microsoft has breached EU antitrust rules by tying its communication and collaboration product Teams to its popular productivity applications included in its suites for businesses Office 365 and Microsoft 365.”
Microsoft had actually added its Teams app to its Office 365 productivity suite in 2017 for free, to eventually replace Skype for Business. But in an effort to stave off antitrust issues, Microsoft announced in August 2023 it would begin unbundling Teams from its Office suite in Europe.
And the European Union has previously fined Microsoft 2.2 billion euros for breaching competition rules, including by bundling various products together, such as integrating its own browsers or media players into Windows.
Meanwhile in the United States, Microsoft is still contending with the FTC resistance to its $69 billion acquisition of video game publisher Activision Blizzard, which closed in October 2023.
And of course Microsoft was famously at the centre of a long-running US Department of Justice (DoJ) antitrust case that began in 1998 over the bundling Internet Explorer with the Windows operating system. The tech giant narrowly avoided a corporate breakup over the matter.
Alphabet’s Google is currently facing a similar antitrust issue after a landmark ruling in August 2024 when judge Amit Mehta stated “the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.”
Google is currently awaiting a decision on whether a federal judge will accept the US government’s recommendation that it should be forced to sell off its Chrome browser.
Donald Trump
But all of this does not factor in Donald Trump.
Silicon UK has previously noted that the victory of Donald Trump in the US Presidential election may likely have a notable impact on the tech sector – including its regulation and how the new administration will handle ongoing antitrust cases against tech giants, including Apple and Amazon.
The current head of the FTC, which enforces the US’s antitrust laws, is headed up by a Biden appointee, namely Lina Khan.
Khan has been zealous in her interpretation of antitrust whilst at the federal agency and has been an aggressive enforcer against a number of Big Tech firms and blocked dozens of mergers and acquisitions.
However the FTC has also suffered several defeats in regulating big tech. Two years ago the FTC abandoned a case that sought to block Meta from purchasing virtual reality start-up Within Unlimited.
The agency also hasn’t successfully proved that Meta illegally cut competition by purchasing Instagram and WhatsApp, a case it launched four years ago. But that antitrust trial is still proceeding.
And Trump’s appointment of Elon Musk and former presidential candidate Vivek Ramaswamy to head up the non-governmental ‘Department of Government Efficiency’ (Doge) could play a role as well.
Musk has previously stated the goal to reduce government spending by $2 trillion, and as well dramatically reduce the amount of regulation facing businesses.
