The Federal Trade Commission (FTC) of the USA is preparing to launch a heavy blow against the cloud computing business of American tech giants $Microsoft (MSFT.US)$ , investigating their anti-competitive behavior. In the final weeks of President Joe Biden's term, the current chairman of this American regulatory institution is stepping up investigations into large technology companies.

According to sources directly familiar with the matter, the FTC is investigating allegations that microsoft used unfair licensing terms to lock in customers and control the cloud computing market.

According to the allegations, microsoft encircled a large number of customers within its Azure cloud infrastructure products through its dominant Windows Server and Microsoft Office products, making it difficult for them to switch to other competitors' cloud products (switching requires high costs, although there are no technical barriers to doing so).

In response, the FTC launched an investigation. The terms under review by the agency include charging high exit fees, significantly increasing subscription fees for users who leave, and the incompatibility of its Office 365 products with competitors' cloud products.

Informed sources also indicated that, as part of the investigation, the FTC has not yet formally requested microsoft to provide documents or other information.

New crackdown

The move to challenge Microsoft's cloud business marks the latest round of crackdown by FTC Chairman Lina Khan on large technology companies. She has been dedicated to curbing the monopoly power of such companies throughout her tenure. $Meta Platforms (META.US)$ And $Amazon (AMZN.US)$ and other large technology companies' monopolistic power, known for her tough approach.

In the Wall Street trading community, Lina Khan has become the public enemy of most traders. However, it is expected that her position will be replaced by someone else after Donald Trump is elected president and takes office next year.

Although the next FTC chair may not adopt a tough stance like Lina Khan, it is expected that large technology companies will still be in the spotlight. This is because the FTC sought feedback from industry participants and the public last year regarding the business practices of cloud computing service providers, and the survey results showed that most feedback expressed concerns about market competition, including licensing practices that restrict the use of certain software capabilities within the ecosystems of other cloud providers.

In addition to the FTC, Microsoft’s terms in the cloud business have also drawn close attention from international regulatory institutions.

Among them, the Competition and Markets Authority (CMA) in the United Kingdom is investigating Microsoft and Amazon. Previously, a survey by the UK's communications regulator (Ofcom) found that the cloud services of Amazon and Microsoft could undermine market competition, as customers complained of being "locked in" to these cloud providers' services. These providers offer exclusive discounts for their own cloud services, but charge exorbitant fees for data migration out of the cloud.

In the European Union, Microsoft successfully reached a multi-million dollar agreement with the European cloud computing industry trade association CISPE in July this year, thus avoiding a formal investigation by EU regulators into its cloud business.

Editor/Rocky