FTC Upgrades Antitrust Investigation into Microsoft (MSFT-US) Over Cloud and AI Bundling

The U.S. Federal Trade Commission has escalated an antitrust probe into whether Microsoft (MSFT-US) uses its cloud and AI products to unlawfully impede competition in compute and enterprise software markets. Microsoft shares fell 0.1% on Friday, continuing a broader sell-off as the stock remains near its 4-month low. According to sources, the FTC has issued civil investigative demands to at least six companies competing with Microsoft in cloud and enterprise software, examining licensing and business practices. The agency is reviewing whether Microsoft makes it harder, more costly, or impossible for users to run Windows, Office, and other products on competing cloud services, and is seeking details on bundling AI, security, and identity solutions. These requests, akin to subpoenas, follow prior filings in late 2024 and are examining changes introduced in 2019, including data center and model-training costs, procurement practices, and OpenAI-related investments. Regulators in the U.K. are also reviewing the same issues. The probe aligns with past scrutiny of Microsoft’s bundling practices, including its handling of Internet Explorer in the 1990s.