Kris Carlon / Android Authority
TL;DR
- The Federal Trade Commission is examining whether Microsoft’s bundling practices violated antitrust rules.
- Investigators say Microsoft lured federal agencies with free software and then locked them into paid services.
- Microsoft denies any wrongdoing, saying its free upgrades were intended only to strengthen the government’s cybersecurity.
The Federal Trade Commission (FTC) has opened an investigation into Microsoft, investigating possible antitrust violations in the company’s business practices. This action follows a report from ProPublica which details how Microsoft could have leveraged its market dominance to gain an unfair advantage in government contracts. (via Bloomberg)
The investigation focuses on Microsoft’s strategy of bundling popular software like Office with cybersecurity and cloud computing services. THE ProPublica The report alleges that Microsoft temporarily offered these bundled services for free to government agencies following a series of high-profile cyberattacks. However, when this free trial period ended, 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 » of some high-profile cyberattacks.
During the SolarWinds hack in 2020, linked to Russian attackers, a flaw in a Microsoft product was exploited. Another ProPublica The report found that a Microsoft engineer had spotted the weakness beforehand, but was dismissed, in part to avoid making the sign-in processes too cumbersome (and thus potentially losing ground to competitors).
Microsoft defended its actions, saying the bundles were intended to address the urgent cybersecurity needs of government agencies. However, the FTC’s investigation will examine whether these actions constitute anticompetitive 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, also argued that Microsoft’s size and influence prevent it from acting more decisively. He likens the company to a “too big to fail” entity and suggests regulators may need to take a tougher line on the market dominance of big tech companies.
The FTC’s investigation is already in full swing, with the agency issuing Microsoft a “civil investigative demand,” similar to a subpoena that requires the company to produce documents and other information. Although details of the investigation remain secret, a Microsoft spokesperson said the scope of the FTC’s requests is “broad, broad and asks that things that are outside the realm of possibility even make sense.”
