Microsoft Succumbs To Regulatory Pressure

On Monday, Microsoft Corporation MSFT announced it will its chat and video app Teams will be sold separately from its Office offerings across the globe, six months after already unbundling them in Europe in an effort to avert a possible antitrust fine. This is good news for its rivals, Zoom Video Communications Inc ZM and Slack, owned by Salesforce Inc CRM, but not for its customers that will have to pay more to get this bundle.

Microsoft dodged the Big Tech crackdown with Bing

Its Bing search engine, along with Edge web browser and advertising services avoided the strict new rules the European Union imposed on Big Tech by not being dominant enough to face the Digital Markets Act. Apple Inc AAPL was just as lucky with its iMessage while Meta Platforms META and its WhatsApp didn’t dodge the bullet. But this was some rare good news for Apple was forced by the Digital Markets Act to make significant changes in the way how it operates its iPhone, iOS, Safari and App Store. Despite the small win, regulators will continue to monitor the development of Big Tech services, especially should any substantial changes arise. 

Regulators are also looking into AI activities

In January, the Federal Trade Commission opened an inquiry into the multibillion-dollar investments that Microsoft, Google and Inc AMZN made in AI startups, namely OpenAI and Anthropic. This inquiry is the first major modern effort to understand the way in which is Big Tech is rapidly strengthening its AI influence. The ties between Big Tech and startups have been facing increased scrutiny since the OpenAI scandal in November, when the company’s board ousted the CEO, after which Microsoft offered to hire Sam Altman and his team. Although Altman ended up returning to OpenAI, concerns were raised about Microsoft’s influence over the startup. As of November, Microsoft does have a seat on the board with its 49 percent stake, but not the power to vote. Microsoft invested $13 billion in OpenAI, while Amazon committed to invest up to $4 billion in Anthropic, followed by Google who committed to invest more than $2 billion.

A new era for Big Tech 

It's no secret that regulators have been slow in addressing the harmful effects of Big Tech on the economy. But, with the Digital Markets Act, they showed their determination to get ahead of the issue for a change. At the very least, 2024 kicked off by forcing Big Tech to bend to new online market rules.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

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