The Federal Trade Commission (FTC) has initiated a comprehensive investigation into Microsoft’s business practices, signaling increased scrutiny of the tech giant. A source familiar with the matter confirmed that the FTC has formally requested Microsoft to provide detailed information as part of this probe.
Microsoft, whose operations span diverse sectors including artificial intelligence, cloud computing, enterprise software, gaming, and hardware devices, has not commented on the matter. The FTC also declined to provide any statement on the ongoing investigation.
Microsoft’s Expanding Influence in AI and Technology
Microsoft has rapidly advanced its presence in artificial intelligence, driven by its investment in OpenAI and the development of its own AI-powered system, Copilot. This growth has further solidified its leadership in various industries but has also drawn concerns over its potential to dominate emerging markets.
In the past, Microsoft has faced antitrust scrutiny on multiple fronts. Earlier this year, European regulators considered launching a formal investigation into its partnership with OpenAI to assess competition in the AI sector. While that inquiry did not materialize, it highlighted concerns over Microsoft’s growing influence in AI and its implications for market fairness.
Additionally, Microsoft faced resistance from the Federal Trade Commission regarding its $69 billion acquisition of Activision Blizzard, a major video game publisher. Critics argued the deal would create a monopoly in the gaming industry. Despite these challenges, the acquisition was finalized in October 2023, marking a significant expansion of Microsoft’s gaming portfolio.
A New Chapter for the FTC
The FTC’s investigation comes at a time of significant political transition, as President-elect Donald Trump prepares to take office. Trump is expected to replace current FTC Chair Lina Khan, though his nominee to lead the agency has not yet been announced.
This leadership change could result in the abandonment of existing Federal Trade Commission investigations. Trump’s return to the White House has already raised questions about how his administration will approach antitrust enforcement against tech giants such as Apple, Amazon, and Google.
In Google’s case, a federal court is still weighing whether the company’s search monopoly warrants the divestiture of its Chrome browser. Decisions like these could set precedents for how future cases are handled under the new administration.
The FTC’s Track Record in Regulating Big Tech
Under Khan’s leadership, the Federal Trade Commission has actively sought to block numerous mergers and acquisitions in the tech sector, often in collaboration with the Justice Department. However, the agency has faced notable setbacks.
While it opposed Microsoft’s acquisition of Activision Blizzard, the FTC ultimately failed to prevent the merger. Similarly, it dropped its case against Meta’s purchase of the virtual reality start-up Within Unlimited and has yet to prove that Meta’s acquisitions of Instagram and WhatsApp harmed competition.
These defeats have raised questions about the FTC’s ability to regulate big tech effectively and whether the incoming administration will take a different approach to addressing competition concerns.
Implications for Microsoft and the Tech Industry
The outcome of the Federal Trade Commission’s investigation into Microsoft could have far-reaching implications, not only for the company but also for the broader tech industry. As regulators worldwide grapple with the rapid evolution of artificial intelligence and digital markets, this case could set critical benchmarks for how major players are held accountable for maintaining fair competition.
For Microsoft, which has faced antitrust challenges in the past, this probe represents another significant hurdle as it continues to expand its influence across various sectors. The investigation will likely remain a focal point in the ongoing debate over the balance between innovation and market regulation in the tech industry.
