The Federal Trade Commission (FTC) is reportedly investigating Microsoft like it's 1998. In the waning days of the Biden administration, the investigation of outgoing Chairwoman Lina Khan is said to be gaining momentum, according to ProPública. The FTC is particularly concerned about Microsoft's combination of ubiquitous Office products with cybersecurity and cloud computing services. That includes a deal to update government packages for a limited time, which essentially had the effect of using a government cybersecurity crisis to sell more licenses.
Add more details to reports Bloomberg and the Financial times in November about an FTC investigation into the Windows maker. The publications said Microsoft's competitors complained that combining its popular software with cloud services made it harder to compete. ProPública says FTC attorneys have recently interviewed and scheduled meetings with Microsoft's competitors.
Microsoft confirmed that ProPública that the FTC 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 providing official examples, that the FTC document is “broad, wide-ranging, and asks for things that are outside the realm of possibility to even be logical.”
The investigation follows a separate process ProPublica Report November about how Microsoft appeared to exploit 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 was said to have offered to upgrade the government's existing packages (including Windows and its Office suite) to a more expensive version that added its advanced cybersecurity products. Microsoft also sent consultants to install the updates and train employees to use them.
Many divisions of the US government agreed (including all military services in the Department of Defense) and then began paying for the more expensive packages after the trial was over. (The hassle of switching to a different cybersecurity product after the trial was over virtually guaranteed that would be the case.) ProPublica The account essentially describes Microsoft as exploiting a cybersecurity crisis to expand sales and improve its bottom line. Just late-stage capitalism stuff, y'all.
Ironically, the sales tactic was the result of security flaws by (you guessed it) Microsoft. Biden's request for Big tech leaders to boost government cybersecurity followed the SolarWinds attack that exploited a vulnerability in a Microsoft identity service. The company reportedly knew that the app contained a “security nightmare” that allowed hackers to spoof legitimate employees and probe sensitive information without raising suspicion. But fixing the flaw would add friction to government logins as the company competed for contracts in the United States. Microsoft reportedly chose to remain silent rather than risk losing business.
According to experts who spoke with ProPúblicaThe government's test sales plan could have violated procurement and competition regulations. The publication reported that even Microsoft lawyers feared the deal would raise antitrust concerns.
If this sounds familiar, it echoes the government's position. 1998 antitrust lawsuit against Microsoft. The group was also a star of that show, with the FTC accusing the company of engaging in anticompetitive practices by including Internet Explorer with Windows, a move seen in those early days of the Internet as stifling rivals like Netscape.
