Kris Carlon / Android Authority
TL;DR
- The Federal Trade Commission is looking into whether Microsoft’s bundling practices have broken antitrust rules.
- Investigators allege Microsoft lured federal agencies with free software only to lock them into paid services later.
- Microsoft denies any wrongdoing, saying its free upgrades were solely meant to strengthen government cybersecurity.
The Federal Trade Commission (FTC) has initiated an investigation into Microsoft, probing potential antitrust violations within the company’s business practices. This action follows a report by ProPublica that detailed how Microsoft may have leveraged its market dominance to gain an unfair advantage in government contracts. (via Bloomberg)
The investigation centers on Microsoft’s strategy of bundling popular software like Office with cybersecurity and cloud computing services. The ProPublica report alleges that Microsoft temporarily offered these bundled services to government agencies free of charge following a series of high-profile cyberattacks. However, upon the conclusion of this free trial period, government agencies often found themselves locked into these services, becoming dependent on Microsoft’s offerings.
Critics point out that Microsoft’s strategy not only sidelined other cloud and security providers but also pushed the government to work closely with Microsoft’s Azure platform, even when Microsoft itself was partly “responsible” for some high-profile cyberattacks.
In the 2020 SolarWinds hack, which was linked to Russian attackers, a flaw in a Microsoft product was exploited. Another ProPublica report found that a Microsoft engineer had spotted the weakness beforehand but was overruled, partly to avoid making login processes too cumbersome (and thus potentially losing ground to competitors).
Microsoft has defended its actions, stating that the bundled offerings were intended to address the urgent cybersecurity needs of government agencies. However, the FTC’s investigation will scrutinize whether these actions constitute anti-competitive behavior, potentially leveraging the company’s market dominance to unfairly exclude competitors and restrict consumer choice.
Senator Ron Wyden, a Democrat from Oregon, quoted in the ProPublica report, has also argued that Microsoft’s size and influence shield it from more decisive action. He likens the firm to a “too big to fail” entity and suggests that regulators might need to take a harder line on big tech companies’ market dominance.
The FTC’s investigation is already in full swing, with the agency issuing Microsoft a “civil investigative demand,” similar to a subpoena that compels the company to produce documents and other information. While details of the probe remain under wraps, a Microsoft spokesperson stated that the scope of the FTC’s requests is “broad, wide-ranging, and requests things that are out of the realm of possibility to even be logical.”
