FTC Ratchets Up Microsoft Probe, Queries Rivals on Cloud, AI

The US Federal Trade Commission is accelerating scrutiny of Microsoft Corp. as part of an ongoing probe into whether the company illegally monopolizes large swaths of the enterprise computing market with its cloud software and AI offerings, including Copilot.

The agency has issued civil investigative demands in recent weeks to companies that compete with Microsoft in the business software and cloud computing markets, according to people familiar with the matter. The demands feature an array of questions on Microsoft’s licensing and other business practices, according to the people, who were granted anonymity to discuss a confidential investigation. At least half a dozen companies received the requests, one of the people said.

With the demands, which are effectively like civil subpoenas, the FTC is seeking evidence that Microsoft makes it harder for customers to use Windows, Office and other products on rival cloud services. The agency is also requesting information on Microsoft’s bundling of artificial intelligence, security and identity software into other products, including Windows and Office, some of the people said.

No final decisions have been made, and FTC probes don’t always result in enforcement actions.

Microsoft and the FTC declined to comment.

Read more: Trump’s FTC Moves Ahead With Broad Microsoft Antitrust Probe

Since complaints surfaced from customers and rivals about its licensing practices, Microsoft has made some changes intended to loosen policies and, in particular, help smaller European cloud providers more easily host Microsoft products. The company also struck an agreement last year with a group representing European cloud providers that takes further steps to address the concerns.

Microsoft has also said that some of its products aren’t fully interoperable with rival clouds because the technology underpinning some features is different. Additionally, a series of damaging hacks has put increasing pressure on the company to offer more robust security features in its core products.

The former FTC chief Lina Khan launched the investigation into Microsoft during the waning days of the Biden Administration. The agency has continued its work during Donald Trump’s second term, meeting with companies and other groups to gather information, Bloomberg previously reported.

Chair of the Federal Trade Commission Andrew Ferguson

Photographer: Stefani Reynolds/Bloomberg

The probe is now in the hands of FTC Chairman Andrew Ferguson. He has largely continued his predecessor’s focus on the technology sector, while pulling back on some of Khan’s other efforts and pursuing White House priorities, including investigations into alleged anti-conservative bias.

Ferguson’s FTC lost an antitrust case against Meta Platforms Inc., though the agency is appealing. The FTC is also pressing ahead with a similar effort targeting Amazon.com Inc. Both cases date back to the first Trump Administration.

The current probe into licensing restrictions that allegedly make it harder, pricier or impossible to use some Windows, Office and other products on rival clouds relates to rules changes Microsoft first introduced in 2019. Those changes also have been examined by UK regulators, and many of the questions in the FTC demand appear to echo that work, according to one of the people.

The queries about tying or bundling software offerings into other products like Windows and Office echo the Justice Department investigation into Microsoft in the late 1990s. That landmark case examined how the company baked Internet Explorer into Windows in an effort to handicap rival Netscape and illegally extend its Windows monopoly.

The FTC sent Microsoft a demand for information in late 2024, Bloomberg previously reported. The document compelled the company to turn over reams of data about its AI operations, including the cost to train models and obtain data, going as far back as 2016. The agency sought details about Microsoft data centers, its struggles to find enough computing power to meet customer demand and the company’s software licensing practices.

Most of the questions zeroed in on Microsoft’s licensing practices. About a third of them focused on the company’s AI business and reflected concerns that Microsoft canceled some of its own work after investing in OpenAI and leaning heavily on its software, eliminating potential competition.

--With assistance from Brody Ford and Leah Nylen.

To contact the reporters on this story:
Josh Sisco in San Francisco at jsisco6@bloomberg.net;
Dina Bass in Seattle at dbass2@bloomberg.net;
Matt Day in Seattle at mday63@bloomberg.net

To contact the editors responsible for this story:
Robin Ajello at rajello@bloomberg.net;
Sara Forden at sforden@bloomberg.net

© 2026 Bloomberg L.P. All rights reserved. Used with permission.