Microsoft Corp (NASDAQ:MSFT) may become the latest mega-cap technology company under regulatory scrutiny.
What Happened: The Federal Trade Commission (FTC) is preparing to investigate Microsoft for anti-competitive behavior, the Financial Times reported Thursday, citing people with direct knowledge of the matter.
The FTC reportedly plans to investigate Microsoft's cloud business, focusing on allegations that the company is using restrictive licensing to lock customers into its Azure cloud platform. Microsoft's tactics allegedly include higher fees for customers switching to rival services, exit fees, and making Office 365 products incompatible with competitor clouds.
FTC authorities previously attempted to halt Microsoft’s acquisition of gaming company Activision Blizzard in 2022 for anti-competitive practices but lost its suit in the United States District Court for the Northern District of California.
Why it Matters: FTC Chair Lina Khan, appointed by outgoing President Joe Biden, has pursued extensive antitrust litigation against Big Tech names, including Apple Inc, Alphabet Inc, Amazon.com Corp and Meta Platforms Inc.
It is unclear what President-elect Donald Trump‘s plans are for the FTC and Department of Justice, though he has previously touted deregulation. Attorney General nominee Matt Gaetz has previously praised Khan’s lawsuits against technology companies. Incoming heads of the FTC and DOJ could choose to pause or drop ongoing litigation.
Price Action: Shares of Microsoft entered a short period of volatility on Thursday. The company’s share price decreased over 1.3% before shortly stabilizing. Microsoft’s stock is trading at $427.27 at the time of publication, up 0.48%.
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