The U.S. Federal Trade Commission is reportedly preparing to launch an investigation into allegations that Microsoft Corp. allegedly resorts to anti-competitive practices in its cloud business.

The Financial Times, referring to “anonymous people with direct knowledge of the subject”, reported that the FTC is looking into allegations that Microsoft is abusing its market power by imposing punitive licensing terms to prevent customers from moving their data from Azure to other platforms.

Among the allegations are that Microsoft dramatically increases subscription fees for those who leave, imposes high exit fees and would make Office 365 products incompatible with competing clouds. The net result of Microsoft’s alleged actions is to make it difficult and expensive for existing customers to leave its cloud ecosystem.

The FTC has not yet formally requested documents or other information from Microsoft as part of the preliminary investigation, suggesting that a possible formal investigation is in its early stages and that it does not There is no guarantee that it will continue.

An upcoming change of administration in the United States, following the election of Donald J. Trump as the 47th President of the United States, could also alter the pursuit of an investigation, as Republicans have also expressed concerns about big tech companies and their practices in the past. . Conversely, the new administration could also be more lenient toward big tech companies as part of its promise to reduce regulation and other barriers that it says stifle innovation and growth.

FTC investigation into Microsoft’s practices with Azure comes after Google LLC wrote to the commission in June 2023 accusing Microsoft of anti-competitive practices.

In the letter, Google claims that Microsoft enforces software licensing restrictions that effectively force customers to use its Azure cloud computing services in order to save money. The accusations included that Microsoft took advantage of the dominance of Windows Server and Office to pressure its customers to use Azure and used a “complex web” of licensing restrictions designed to prevent companies from diversifying their software suppliers. ‘business.

If this starts to sound like what the FTC is investigating, it may be that, as Google has referenced Microsoft’s policy of charging third-party cloud infrastructure providers, such as Google Cloud and Amazon Web Services Inc., fees to run software like Windows Server and Office on their respective platforms. Costs are ultimately passed on to customers, but there are no additional fees for running Microsoft software on the Azure cloud.

Holger Mueller of Constellation Research Inc. pointed out last year that there is a long history of software vendors trying to keep out competitors through licensing terms. “The basic ploy is that they either limit services by not allowing them to run on other clouds, or they charge more to allow them to do so,” Mueller said.

Image: SiliconANGLE/Ideogram