Federal regulators are aggressively expanding their investigation into Microsoft. The Federal Trade Commission is looking for evidence that the tech giant uses illegal tactics to dominate the enterprise software market. This probe specifically targets how the company manages its cloud computing and artificial intelligence products.
Officials have sent detailed demands to Microsoft competitors in recent weeks. They want to know if the Windows maker traps customers in its ecosystem. The agency suspects these practices prevent businesses from switching to rival services. This creates a major hurdle for fair competition in the booming tech industry.
Scrutiny on Licensing and Subpoenas
The FTC has moved beyond casual questions. The agency issued civil investigative demands to several companies that compete with Microsoft. These demands work just like subpoenas. They force companies to hand over documents and answer specific questions about their dealings with the tech giant.
Sources say the investigation is now under the direction of FTC Chairman Andrew Ferguson. His team focuses heavily on licensing agreements. They want to see if Microsoft punishes customers who try to use software like Office 365 on rival cloud platforms.
Key areas of the investigation include:
- ** punitive licensing fees** charged to customers using non-Azure clouds.
- Technical incompatibility that makes software run poorly on other platforms.
- Bundling strategies that force companies to buy unwanted products.
Regulators believe these rules act as a “tax” on businesses. It makes it financially impossible for many companies to leave the Microsoft ecosystem. This keeps them locked into paying for Azure cloud services even if they prefer a different provider.
AI Dominance and Market Control
A major part of this new probe involves artificial intelligence. The FTC is worried about how Microsoft bundles its AI tools. The company recently started integrating its Copilot AI into widely used products like Windows and Word.
Regulators fear this gives Microsoft an unfair edge. Smaller AI startups cannot compete when the dominant player puts its own tool on millions of computer screens automatically. This mirrors the browser wars of the 1990s but on a much larger and more complex scale.
There is also concern regarding the partnership with OpenAI. The FTC is asking if Microsoft canceled its own internal AI research after investing billions in the maker of ChatGPT. Killing internal innovation to rely on a partner could violate antitrust laws. It effectively removes a potential competitor from the market before they can even launch a product.
Rivals Voice Strong Complaints
This investigation follows years of complaints from major competitors. Google has been one of the loudest voices against these practices. The search giant argues that Microsoft uses its legacy dominance in desktop operating systems to unfairly win the cloud war.
Google filed a formal complaint with the European Commission in September 2024. They alleged that Microsoft trapped customers with restrictive licensing. However, the situation in Europe shifted recently.
Giorgia Abeltino, Head of Government Affairs for Google Cloud Europe
Google dropped its specific complaint in November 2025. This happened only because European Union regulators decided to launch their own broader investigation. The pressure is now mounting on both sides of the Atlantic.
Microsoft Defends Its Position
Microsoft firmly denies any wrongdoing. The company states that its products work best together by design. They argue that full compatibility with rival clouds is technically difficult because the underlying technology differs.
Security is another defense used by the tech giant. Microsoft claims that controlling the entire ecosystem allows them to offer better protection against cyberattacks. Recent high profile hacks have put pressure on the company to lock down its systems. They argue that opening up too much could create vulnerabilities for hackers to exploit.
However, critics say “security” is often just an excuse to block competition. The FTC will now decide if these are valid technical reasons or just business tactics designed to kill rivalry. The outcome of this probe could change how businesses buy software for the next decade.
It is clear that the era of unchecked expansion for big tech is ending. Regulators are demanding fair play in the cloud and AI sectors. The result will impact every business that relies on digital tools to operate.
