Is Microsoft in Hot Water With The FTC Over AI Operations Antitrust Issues?

The Federal Trade Commission (FTC) will move ahead with a wide-ranging antitrust probe into Microsoft’s AI operations. Announced in the final days of the Biden administration, the Trump administration’s new FTC chair Andrew Ferguson will lead the probe. The FTC sent Microsoft a civil investigative demand late last years asking it to provide data about its AI models, including how training data is obtained and how much it costs to train an AI. The civil investigative demand stretches all the way back to 2016 and covers nearly a decade’s worth of data.

Why the FTC is investigating Microsoft

The agency will also investigate Microsoft for canceling some of its own internal AI development after agreeing to invest in competitor OpenAI. Microsoft did not disclose its investment in OpenAI to regulators ahead of time, as it should have. The FTC will investigate whether the deal was structured as a partnership in order to circumvent a merger investigation, which could have led to the deal being blocked.

The FTC also asked for additional details about Microsoft’s data centers and the tech giant’s difficulty obtaining enough computing power to meet customer demands. It also wants more information about how Microsoft licenses software bundles — competitors have complained that bundles like Microsoft 365 make it difficult to compete against the software giant.

The FTC said it is seeking to determine whether or not Microsoft’s other businesses give it an advantage over other AI companies and said it hopes to get a better grasp on cloud computing costs through the data provided by Microsoft. These additional details and data will help determine whether or not to bring a case against Microsoft.

These investigations can take years and often don’t result in charges. Microsoft will likely seek to narrow the scope of the information and data requested, which is a common move during these investigations.

FTC to pursue other cases against big tech companies

This move indicates that new FTC chair Ferguson intends to keep investigating tech giants — a commitment he affirmed in his first public remarks at the end of February when he called investigating the tech sector his top priority.

Microsoft is not the only tech company currently under FTC investigation. Ferguson inherited several cases from the Biden administration, including lawsuits against Amazon Inc. and Meta Inc. (which owns Facebook and Instagram).