When regulators begin sending civil investigative demands, a certain silence descends upon Washington. Envelopes ending up on desks at rival tech companies—no press conferences, no leaks. People who monitor these things professionally claim that Microsoft hasn’t experienced this level of pressure since the late 1990s, and that’s about how things are right now.
The investigation by the Federal Trade Commission has been ongoing for over a year. It started during the Biden administration and has persisted into the Trump term, which surprised some who thought the new White House would ease off. A parallel review is being conducted across the Atlantic by the UK’s Competition and Markets Authority. It appears that both regulators focus on the same fundamental issues. Does Microsoft encourage customers to use Azure by using its control over key enterprise software, such as Office, Windows, and Teams? Are the exit doors purposefully closed once those clients are inside the cloud?
In particular, the complaint about the egress fee has gained traction. For years, smaller AI startups have been quietly complaining that it costs them a lot of money to move data out of Azure, making multi-cloud strategies unfeasible. Although investors appear to think that the practice will eventually be curtailed, it is unclear how aggressive any final rule may be.
The historical rhyme is difficult to ignore. Microsoft was sued by the Justice Department in 1998 for including Internet Explorer with Windows. The trial took a long time. The company was ordered to be split in two by a judge. An appeals court overturned that decision, and Microsoft agreed to share some interfaces after receiving criticism. The business moved cautiously, almost gingerly, around rivals for years after that. It may have avoided the wave of antitrust lawsuits that hit Google, Meta, and Amazon over the previous five years thanks to that caution.
Satya Nadella followed. Under his direction, Microsoft invested about $13 billion in OpenAI and bought Activision Blizzard, GitHub, and LinkedIn. Azure now holds roughly 25% of the worldwide market for cloud infrastructure. Copilot appeared everywhere and was integrated into Teams, Word, and Outlook. The growth was remarkable. Additionally, it generated precisely the type of integrated stack regulators that are typically viewed with suspicion.
Microsoft’s caution following the 1998 case was almost legendary, according to competition lawyers in Brussels. The implication, which is frequently left unsaid, is that the AI race and pressure from Wall Street finally forced the company to take chances it had previously shied away from. According to those in the regulatory community, the investigation is more about setting a boundary before the AI market unifies in the same way that search and social media have already done than it is about punishing Microsoft for any one transgression.
It’s unclear what the FTC will actually do. Staff members are still required to vote on whether to file a complaint following the civil investigative demands. It must then be approved by commissioners. That’s not all automatic. Microsoft has one of the most seasoned legal teams in the world, and over the past two years, the company has discreetly hired legal experts in Washington and London.
Even so, there are some unsettling similarities to the browser wars as I watch this play out. Similar argument, different product, different decade. Instead of placing icons, there are egress fees. Use Copilot rather than Internet Explorer. Once more, Microsoft is attempting to justify integration as a convenience rather than a form of coercion.
