FTC Intensifies Antitrust Probe into Microsoft’s Cloud and AI Practices

The U.S. Federal Trade Commission (FTC) is escalating its investigation into Microsoft’s business practices in the cloud and artificial intelligence (AI) markets, signaling increased scrutiny of the tech giant’s potential monopolistic influence. The probe, initially launched in November 2024, centers on whether Microsoft unfairly leverages its software licensing to dominate the cloud computing landscape.

FTC Issues Civil Investigative Demands

In recent weeks, the FTC has issued “civil investigative demands” to at least half a dozen companies that compete with Microsoft in the business software and cloud computing sectors, according to sources familiar with the matter [Datacenter Dynamics]. These demands require the companies to provide detailed information regarding Microsoft’s licensing practices and other business operations.

Focus on Licensing and Bundling

The investigation is specifically examining whether Microsoft intentionally creates obstacles for customers who wish to utilize its products on competing cloud platforms [Bloomberg Law]. The FTC is too requesting information on Microsoft’s bundling of AI, security, and identity software with other products like Windows and Office, assessing whether these practices disadvantage competitors [Bloomberg Law].

Previous Scrutiny and International Investigations

This isn’t Microsoft’s first encounter with antitrust concerns regarding its cloud services. In the summer of 2025, the UK’s Competition and Markets Authority (CMA) concluded a cloud services market investigation, identifying competition issues and initiating further investigation into both Microsoft and Amazon Web Services [Datacenter Dynamics]. The CMA’s report highlighted concerns about Microsoft’s software licensing, noting restrictions on availability to Google and AWS, and the disproportionate use of Microsoft software on Azure.

European Compromises

Microsoft has reached some compromises in Europe, collaborating with the Cloud Infrastructure Service Providers in Europe (CISPE) to enable its members to run Microsoft software on their platforms at comparable prices [Bloomberg Law]. CISPE’s European Cloud Competition Observatory (ECCO) has awarded Microsoft a “green” status, acknowledging changes to Microsoft’s terms that address competition concerns.

Current Status and Future Outlook

While the FTC investigation is actively underway, the agency has not indicated whether it will pursue enforcement actions [Reuters]. Both Microsoft and the FTC have declined to comment on the ongoing probe [Datacenter Dynamics]. The outcome of the investigation could significantly impact Microsoft’s cloud and AI strategies, as well as the competitive dynamics of the broader enterprise computing market.

Key Takeaways

• The FTC is actively investigating Microsoft’s cloud and AI practices for potential antitrust violations.
• The investigation focuses on software licensing and bundling practices.
• Microsoft has faced similar scrutiny from regulators in the UK and Europe.
• The FTC has issued civil investigative demands to Microsoft’s competitors.
• No final decisions have been made regarding enforcement actions.