Summary
Regulatory pressure on Microsoft is intensifying. The company is again the focus of a reinvigorated U.S. antitrust agenda led by a more assertive Federal Trade Commission (FTC) under the second Trump administration. Simultaneously, it is contending with scrutiny from global regulators and facing allegations of anti-competitive licensing practices in the cloud software market.
FTC Probe into AI and Cloud
In late 2024, the FTC opened an expansive investigation into Microsoft’s artificial intelligence and cloud operations. The inquiry, still ongoing, seeks detailed information on AI training costs, data acquisition, and licensing terms. Officials are assessing whether Microsoft’s growing influence in AI—particularly through its relationship with OpenAI—is limiting competition.
FTC investigates Microsoft’s AI partnerships and cloud licensing terms for anti-competitive behavior.
The investigation also examines Microsoft’s role in cloud infrastructure and its alleged practice of penalising customers who run Microsoft software on third-party platforms like AWS and Google Cloud.
Gail Slater’s Appointment
Gail Slater has been confirmed as Assistant Attorney General for Antitrust. A seasoned lawyer and former adviser to Vice President JD Vance, Slater has expressed a clear focus on maintaining competitive markets, including in the tech sector.
Her appointment marks a departure from traditional Republican hands-off antitrust policy. Under the Trump administration, Slater’s approach reflects a blend of regulatory restraint and targeted intervention.
UK Licensing Scrutiny
In early 2025, the UK Competition and Markets Authority (CMA) issued provisional findings criticising Microsoft’s cloud licensing terms. The CMA argues that these terms make it more costly to run Microsoft software on competing platforms such as AWS, Google Cloud, and Alibaba—thereby advantaging Azure.
UK CMA criticises Microsoft’s licensing rules that favour Azure over AWS and Google Cloud.
The CMA is considering designating Microsoft and AWS as firms with "strategic market status," a move that would allow it to impose stricter rules on their conduct.
OpenAI Investment Reviewed
The CMA has separately reviewed Microsoft’s partnership with OpenAI. It concluded that the investment does not amount to a merger and declined to open a formal investigation. Nonetheless, concerns over Microsoft’s broader position in AI remain.
EU and National Complaints
The European Commission is assessing whether Microsoft’s bundling of Teams with Office 365 violated competition law. The probe follows a complaint from Slack. Microsoft has since offered to unbundle Teams and revise its pricing, but the Commission has yet to determine whether these changes are sufficient.
European regulators scrutinise Microsoft’s bundling of Teams with Office 365 amid competition complaints.
In France, regulators are investigating Microsoft’s search syndication deals, where Bing is suspected of disadvantaging rival providers. Germany’s Federal Cartel Office has designated Microsoft a company of "paramount significance," granting it expanded oversight.
Microsoft also reached a settlement with CISPE, a coalition of European cloud providers. The agreement involves revising Microsoft’s licensing policies. AWS and Google did not participate in the deal and continue to call for further regulatory action.
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Competitor Pushback
Microsoft’s rivals have played a key role in driving regulatory interest. AWS and Google Cloud argue that Microsoft’s licensing model restricts user choice and increases costs for organisations choosing non-Azure environments. These complaints have contributed to regulatory reviews in multiple jurisdictions.
Slack’s complaint to the EU over Teams bundling initiated the current European Commission investigation, which has already prompted product changes from Microsoft.
Microsoft’s Position
Microsoft has generally cooperated with regulators, offering changes to licensing terms, product structures, and settlement proposals. However, it denies any breach of competition law and frames its actions as voluntary efforts to improve customer choice.
The company maintains that many of the changes preceded external pressure and highlights the presence of strong competitors as evidence of a functioning market.
Trump 2.0 and Tech Antitrust
The re-election of President Trump has not slowed regulatory interest in Big Tech. In fact, many investigations initiated under the previous administration continue. The appointment of individuals like Slater reflects a bipartisan consensus on addressing market concentration in the tech industry.
While the administration may prefer negotiation over litigation, its sustained scrutiny of Microsoft’s practices signals a consistent regulatory agenda.
Key Events in 2025
January: Trump administration begins; Andrew Ferguson becomes FTC Chair; Gail Slater confirmed as DOJ Antitrust Division head.
January: UK CMA releases provisional findings on cloud market; identifies Microsoft’s licensing as anti-competitive.
February: France opens investigation into Microsoft’s search syndication contracts.
March: FTC confirms ongoing investigation into Microsoft’s AI and cloud practices.
Microsoft is under significant regulatory pressure across multiple regions. Its dominance in cloud computing, enterprise software, and AI has triggered a coordinated response from antitrust authorities. With both domestic and international regulators raising concerns, the company must defend its practices, adapt its approach, and find compromises that address competitive imbalances.
Disclaimer: This article is based on publicly available information as of March 2025. The regulatory landscape remains fluid. For specific legal guidance, consult official sources and professional counsel.
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