The US Federal Trade Commission (FTC) is reportedly gearing up to investigate Microsoft’s cloud computing operations over alleged anti-competitive practices. The probe is expected to be mainly on claims that Microsoft is leveraging its dominance in productivity software to stifle competition in the cloud computing market.
The Financial Times, citing sources privy to the matter, said that Redmond is accused of imposing restrictive licensing terms to discourage customers from migrating their data from Microsoft’s Azure platform to other companies’ services. Allegations include significantly raising subscription fees for departing clients, imposing steep exit charges, and designing its Office 365 software so as to be incompatible with other cloud platforms.
While the US regulator has not yet made formal requests for documents or information from Microsoft, the potential inquiry underscores the regulator’s broader campaign against the monopolistic practices of tech giants. The FTC’s investigation would follow feedback collected last year from industry stakeholders and the public about the business practices of cloud service providers.
Responses highlighted concerns over software licensing agreements that limit interoperability, high fees for data transfers, and minimum spending contracts that bind customers to certain providers.
Growing international regulatory pressure on the cloud industry
Microsoft’s cloud operations have also drawn attention from regulators outside the US. In the UK, the Competition and Markets Authority (CMA) is examining the company’s practices, following a report by Ofcom that raised concerns about “lock-in” tactics, exclusivity discounts, and costly data egress fees. The CMA probe also includes Amazon’s practices.
In the European Union (EU), meanwhile, Microsoft avoided a formal investigation by striking a multimillion-dollar agreement with competing cloud providers in July. However, its practices remain under scrutiny amid broader concerns about market dominance.
In September, the CMA announced a four-month delay in the release of its report on the cloud infrastructure market, rescheduling the deadline to 4 August 2025. The British competition watchdog explained that the extension would allow for a more in-depth analysis of intricate issues, particularly those concerning cloud providers’ licensing practices. The CMA also noted that extra time was necessary to thoroughly review new evidence submitted after the initial cut-off date.
The global cloud computing market has become one of Big Tech’s most profitable sectors, driven in recent years by surging demand for artificial intelligence (AI) applications. According to Gartner, spending on cloud services reached $561bn in 2023 and is projected to grow to $675bn in 2024. Microsoft holds a 20% share of the global cloud market, trailing AWS at 31% but ahead of Google Cloud, which accounts for 12%. Intense competition between these providers has led to a flurry of regulatory activity and accusations.
Recently, Google filed an antitrust complaint against Microsoft with the EU, alleging unfair practices in the licensing of Azure cloud services. Reports surfaced that Google claimed Microsoft’s licensing terms make it challenging and costly to use Windows Server and Office products on cloud infrastructures other than Azure.
Read more: Google launches EU antitrust complaint over Microsoft cloud practices
