Microsoft faces federal investigation in the US over cloud computing practices

The Federal Trade Commission is preparing to investigate Microsoft's cloud computing business over alleged anticompetitive practices, marking another major regulatory challenge for the tech giant.
The probe will examine whether Microsoft abused its market power through punitive licensing terms that prevent customers from moving their data away from its Azure cloud service, according to The Financial Times, citing people with direct knowledge of the matter.
The investigation will focus on several alleged tactics, including steep subscription fee increases for customers who attempt to leave the platform, substantial exit fees, and claims that Microsoft made its Office 365 products incompatible with competing cloud services.
The FTC's move comes after the agency sought public feedback on cloud providers' business practices last year, where respondents highlighted concerns about restrictive software licensing and high data transfer fees.
Microsoft currently holds approximately 20% of the global cloud market share, placing it second behind Amazon Web Services at 31%, with Google Cloud following at 12%, The Financial Times reported.
The investigation emerges during the final weeks of the Biden administration, as FTC Chair Lina Khan continues aggressive oversight of major technology companies. Khan's tenure is expected to end when President-elect Donald Trump takes office next year.
Microsoft has faced similar scrutiny internationally. The UK's Competition and Markets Authority is investigating both Microsoft and Amazon over customer lock-in concerns, while the company reached a multimillion-dollar settlement with European cloud providers in July to avoid formal investigation there.