FTC intensifies investigation into Microsoft’s cloud and AI commercial practices

Regulators in Washington have escalated scrutiny of Microsoft by dispatching formal information requests to competing vendors about how Microsoft sells and licenses cloud software and AI features. These requests — sent to more than half a dozen firms — target deal structures, licensing terms and distribution arrangements tied to enterprise cloud services and AI tools such as Copilot. The shift marks a transition from preliminary fact-finding to systematic evidence gathering, signaling that the agency is building a document-based record rather than relying solely on public complaints. For Microsoft, the probe concentrates on commercial practices that can tilt platform economics: how licenses are tied across product lines, margin allocation for bundled services, and any exclusionary terms that limit rivals’ market access. For rivals and enterprise customers, the investigation raises the prospect of discovery-driven disclosures that could be used in negotiations, litigation, or further regulatory filings. The timing is consequential because AI capabilities are increasingly woven into core enterprise contracts, so any remedy could alter licensing norms across the cloud sector. Potential outcomes range from negotiated settlements and behavioral undertakings to structural remedies, each carrying different operational and financial consequences for vendors and large corporate buyers. The inquiry also underscores a broader regulatory trend: antitrust authorities are treating AI integration and cloud bundling as competitive levers worthy of scrutiny, not mere product innovation. That approach increases legal and compliance burdens for platform providers and may prompt firms to revisit contract language, partner programs, and product packaging. Microsoft is likely to cooperate while defending the competitive benefits it cites for integrated offerings, but the accumulation of third-party testimony and documents increases the likelihood regulators will find factual bases for intervention. For competitors, the records gathered by the agency could level the information asymmetry that large incumbents often exploit in negotiations. In short, this development raises the regulatory cost of certain go-to-market practices in cloud and enterprise AI and could produce precedents that reshape licensing and bundling across the industry.