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U.S. Regulators to Investigate Microsoft’s Cloud Business over Anti-Competitive Practices

Cloud

Business Honor
15 November, 2024

The FTC probes Microsoft’s alleged tactics to prevent customers from switching cloud providers, including hefty fees.

The U.S. Federal Trade Commission (FTC) is preparing to launch an investigation into Microsoft’s cloud computing practices, focusing on potential anti-competitive behavior in its Azure cloud service. According to a report by the Financial Times on Thursday, the FTC will examine whether Microsoft is using its dominant position in the market to unfairly restrict customers from migrating their data to competing cloud platforms.

The probe reportedly revolved around charges that Microsoft proffers punishing licensing terms, making it difficult or too expensive for customers to leave its Azure platform. Some of the tactics being probed include the heavy surcharges commanded on leaving customers in subscription fees along with exit fees. Besides, regulators are also probing claims that Office 365 products from Microsoft have been made operable only on other clouds, thereby effectively tying users in its ecosystem.

If this indeed is the case, then it could be argued that such practices are in violation of the antitrust laws that are ostensibly designed to encourage competition and check monopolistic tendencies in the tech arena. Amazon Web Services (AWS), Google Cloud, are only but a few of Microsoft's large competitors who have complained about the market practices of this tech giant where the Azure cloud service competes with them in the market.

Although the FTC has yet to comment officially on its stance on the issue, Microsoft declined to comment for Reuters on the matter. This investigation, however, brings about more focus by U.S. regulators on the competitive dynamics within the fast-growing cloud computing sector in the last years.

Such findings can have serious implications for the overall strategies for enterprise software and services, possibly affecting the cloud business of Microsoft.