FTC Probes Microsoft Over Azure and AI Bundling as Antitrust Pressure Builds

The FTC's civil investigative demands, similar to subpoenas, went to at least half a dozen companies that compete with Microsoft. The Verge reported on 1 June that the letters run to more than 15 pages and more than 15 questions, often with extensive sub-parts.

The questions show the agency asking about Microsoft's business agreements, licensing arrangements and the interoperability of its products. It wants organisational charts, business and marketing plans, product roadmaps, and detail on bundling of features, pricing, discounting and profitability. Other questions probe the costs and barriers to entry in markets Microsoft operates in. They ask specifically about Microsoft's impact on competition, according to the report.

There is no guarantee the investigation ends in a legal complaint. The Verge says the probe began under the Biden administration in 2024 and continued under President Donald Trump. After further investigative steps, FTC staff will decide whether to recommend filing a case, and the agency's two commissioners will vote. Both commissioner seats are held by Republicans. There are no minority party commissioners to object or publicise a decision to walk away.

What the FTC wants to know

The CID topics suggest the agency is focused on whether Microsoft used unfair methods of competition in cloud, software products and related services in violation of the FTC Act, according to an industry source who reviewed the letters and was granted anonymity to speak on nonpublic information. The Verge says it verified the document.

Some questions are aimed at understanding the cloud industry as a whole: who the key players are, how they organise themselves, and how hard it is to break in. Others ask companies to detail plans for bundling multiple features and products. There are also similar questions about competition around AI products, including competing for customers against businesses that combine extra features or services with an AI or software product such as Microsoft 365.

George Washington University law professor and former FTC chair William Kovacic told The Verge that this kind of information gathering tends to happen at earlier stages of an investigation. The questions, he said, suggest the agency is trying to work out which market players to watch and how important tactics like bundling are. The references to AI could indicate the FTC sees it as a potential part of an illegal tying arrangement, or as an important competitive advantage.

Microsoft spokesperson Alex Haurek said the company is "cooperating fully with the FTC and believe our practices promote competition while delivering the innovative products our customers expect." The FTC did not respond to a request for comment.

The licensing complaint that started it

Customers have complained, often anonymously for fear of retaliation, that Microsoft's 2019 changes to its licensing terms made it significantly more costly to run Windows software on infrastructure outside Microsoft's Azure cloud. In 2023, Google responded to a broad FTC inquiry about cloud computing by accusing Microsoft of using dominance in other areas to "give their own cloud products an unearned advantage" and lock in consumers.

Microsoft rejects that framing. Haurek pointed to Google as "a clear example of that dynamic, growing 63% year over year and competing head-to-head with other major providers including AWS, the largest cloud provider." The company insists there is plenty of competition in the cloud sector.

Cloud growth has pushed Microsoft's valuation to historic highs and positioned it for the computing demands of AI. It has also buoyed revenue while hardware including Xbox declined.

The agency is trying to determine which key market players to watch and how important tactics like bundling are.

Separately, a 2024 ProPublica investigation found Microsoft used similar leveraging to gain a foothold across US government agencies after installing free cybersecurity upgrades that came with products that specifically ran on Azure, which would be strenuous to switch away from later. The Verge notes that government contracts and cybersecurity were not among the CID topics disclosed to it. Haurek says Microsoft responded to the government's security requests at the time and that agencies were "free to engage with other vendors."

The US is not alone in looking at this. The Verge reports that the European Commission, the UK Competition and Markets Authority and the Japan Fair Trade Commission have been examining related questions.

Google's remedy phase, and a Chrome breakup on the table

Microsoft's probe lands in a busy period for tech antitrust. Ars Technica reported on 22 April 2025 that the remedy phase of Google's search antitrust trial was getting under way, with the Department of Justice seeking to force the divestiture of Chrome and the unbundling of Android. Google lost the liability phase of that case, with the court finding it violated the Sherman Antitrust Act by "willfully acquiring and maintaining monopoly power."

US District Judge Amit Mehta is overseeing the case. Ars Technica described the DOJ's position as treating it as the most consequential US antitrust matter since the Microsoft trial of the 1990s, and noted that virtually every state has joined the government's case. The DOJ also wants Google's search placement deals banned. The company pays Apple and Mozilla billions of dollars a year to make Google the default search engine.

Google's own proposed remedies amount to less exclusivity in search contracts and more freedom for Android manufacturers to choose app preloads, plus additional government oversight. Mozilla and Apple are expected to back Google's argument that its services are the best available. The DOJ will likely argue that the revenue those two companies receive from the deals makes their testimony less reliable.

Nvidia in China, and a class action over slowing AI

China's State Administration for Market Regulation said on Monday 15 September 2025 that Nvidia violated the country's antitrust law, a preliminary finding tied to its $6.9 billion acquisition of Mellanox Technologies in 2020. Ars Technica reported that Beijing had conditionally approved that deal and that SAMR found Nvidia failed to fully comply with the conditions.

The timing was not accidental. Two people with knowledge of the matter said SAMR reached its conclusion weeks before the announcement and released it to give China leverage in trade talks with the US in Madrid, with a tariff truce due to expire in November. The regulator opened the investigation in December, a week after Washington unveiled tougher export controls on advanced high-bandwidth memory chips and chipmaking equipment.

Fines could run between 1 percent and 10 percent of Nvidia's previous year's sales, and regulators can force changes to business practices. Nvidia did not immediately respond to a request for comment, and SAMR did not immediately respond to a request for further comment.

The AI industry faces its own antitrust claim. Tom's Hardware reported on 21 September 2026 that four plaintiffs subscribed to ChatGPT, Claude, Grok or Gemini filed a proposed class-action lawsuit alleging the developers violated antitrust laws by agreeing to slow AI development. The suit argues the agreement would "reduce the value consumers get for paid AI subscriptions," according to the Associated Press, and says the coordination began in July 2026 after leading labs signed a statement admitting there is "intense competitive pressure not to unilaterally slow" development.

Lead counsel Nick Rowley said: "AI will quickly spin out of human control and could kill us all if we allow AI safety and protocol ... to be controlled by private self-serving agreements between the world's most powerful 'for profit' technology companies." Anthropic founder Dario Amodei's essay acknowledged the antitrust risk and indicated he hoped the government would make an exception. OpenAI's Sam Altman responded on X that the company welcomes a federal framework setting consistent safety requirements for frontier AI, but does not believe it needs an antitrust exemption or legislation to start that work. The Trump administration rejected the idea, with the president calling AI taking over the world a "HOAX."

Chinese state media also pushed back. China Daily called the proposed agreement a "club whose membership rules have been drafted before the guest list is announced," adding that "a global AI-safety framework that excludes China is not quite global."

Washington's shifting antitrust politics

None of this is happening in a stable political setting. The Verge reported on 13 May 2025 on Y Combinator's Little Tech Summit, where Steve Bannon appeared on a panel with former Consumer Financial Protection Bureau director Rohit Chopra. FTC chair Andrew Ferguson was introduced with an AI-generated Ghibli-style avatar. He and DOJ antitrust officials skipped the American Bar Association's spring antitrust meeting across the street, the first time any administration had done so.

Former FTC chair Lina Khan criticised Trump for firing two Democratic FTC commissioners, then posed for a photo with Bannon. Senator Josh Hawley kept up threats against Meta, saying that Zuckerberg's pledge to stop "obvious, outrageous censorship" does not mean "you get to violate antitrust laws." Then Senator Cory Booker walked in, fresh from a 25-hour speech denouncing Trump, and three-fourths of the room stood to applaud.

Luther Lowe, head of public policy at Y Combinator, told The Verge that the event's purpose was to show that "supporting innovation and fair competition can unite people from across the political spectrum." The audience of lawyers, policy experts and government relations staff clearly disapproved of Trump, yet took notes on what the MAGA populists were saying. As The Verge put it, the DC tech policy establishment had to rebrand its talking points: "supporting small businesses" became "economic populism," and breaking up monopolies now needs the justification "because they're suppressing free speech."

For Microsoft, the practical question is narrower. The FTC has questions, documents and a two-member commission that can close the matter quietly. Whether it does is now the thing the company's competitors are watching.