The Federal Trade Commission (FTC) is reportedly investigating Microsoft as if it were 1998. As the Biden administration wanes, the investigation into outgoing Chairman Lina Khan is said to be picking up pace. ProPublica. The Federal Trade Commission is particularly concerned about Microsoft's consolidation of ubiquitous Office products with cybersecurity and cloud computing services. This included a deal to renew government packages for a limited period of time, essentially using the government's cybersecurity crisis to sell more licenses.
This adds more detail to reports from Bloomberg And Financial Times in November about the Federal Trade Commission's investigation into the Windows maker. The publications say Microsoft's competitors have complained that bundling popular software with cloud services makes it harder to compete. ProPublica says FTC lawyers recently conducted interviews and scheduled meetings with Microsoft's competitors.
Microsoft confirmed ProPublica that the Federal Trade Commission issued a civil investigative demand (essentially a subpoena), forcing the company to turn over information related to the case. A Microsoft spokesperson told the publication (without giving official examples) that the FTC document is “broad, expansive and requires things that go beyond the realm of possibility to be even logical.”
The investigation is being conducted separately ProPublica Report from November about how Microsoft apparently took advantage of a series of cyberattacks to sell more licenses to the US government. Following a meeting with President Biden in the summer of 2021, the company reportedly proposed upgrading existing government suites (including Windows and the Office suite) to a more expensive version that added its advanced cybersecurity products. Microsoft also sent consultants to install the updates and train employees on how to use them.
Many parts of the US government agreed, including all military services of the Department of Defense, and then began paying for more expensive packages after the trial ended. (Challenges in switching to another cybersecurity product after the end of testing all but guaranteed that would be the case.) ProPublica's Essentially, the report portrays Microsoft as exploiting the cybersecurity crisis to boost sales and increase profits. Just late-stage capitalism stuff, y'all.
Ironically, these sales tactics arose from security lapses on the part of—you guessed it—Microsoft. Biden's request from leaders of big technology companies to strengthen government cybersecurity follows the SolarWinds attack, which exploited a vulnerability in the Microsoft identity service. The company was reportedly aware that the app contained a “security nightmare” that allowed hackers to deceive legitimate employees and inspect sensitive information without raising suspicion. But fixing the vulnerability would have added problems with government logins when the company was competing for contracts in the United States. Microsoft reportedly chose to remain silent rather than risk losing business.
According to experts who spoke with ProPublicathe government's trial sales scheme may have violated contracting and competition rules. The publication reported that even Microsoft's lawyers feared the deal would raise antitrust concerns.
If this sounds familiar, it echoes the government's thinking. 1998 antitrust lawsuit against Microsoft. The merger was also the star of the show: The Federal Trade Commission accused the company of engaging in anticompetitive practices by including Internet Explorer in Windows. In those early days of the Internet, this move was considered stifling. competitors such as Netscape.