Microsoft has clapped back against the US Federal Trade Commission (FTC) following last week’s report that the regulator was investigating the tech giant, claiming the FTC leaked the news.
Initially reported by Bloomberg before being confirmed by multiple other publications, the FTC is probing Microsoft’s cloud and software licensing operations, cybersecurity services, and AI offerings.
The FTC’s investigation into Microsoft reportedly originated from complaints received last year during a broader examination of the cloud computing market. This formal inquiry follows a year of informal discussions with Microsoft’s competitors and partners and includes an information demand.
Now, Microsoft has requested that the Federal Trade Commission’s Inspector General look into whether agency management improperly leaked information about its antitrust investigation into the tech business. The tech giant is also urging the investigation’s findings to be made public.
Microsoft’s Corporate Vice President and Deputy General Counsel, Rima Alaily, accused FTC management of leaking details about the agency’s antitrust investigation into the company on LinkedIn. She published an open letter on the networking website alleging that the regulatory body had violated its own ethics guidelines and had yet to distribute a copy of the mooted information demand document to Microsoft.
Alaily wrote:
Today, I asked, on behalf of Microsoft, the FTC Inspector General to investigate whether FTC management improperly leaked confidential information about a potential antitrust investigation last week in violation of the agency’s ethics rules and rules of practice. Ironically, almost a week after telling the press about an information demand supposedly issued to Microsoft, we still cannot obtain a copy of this document from the FTC.”
According to these guidelines, new employees are instructed that “the existence of an FTC investigation is nonpublic information” unless the Office of Public Affairs determines that the target has already disclosed it via a press release or government filing.
However, the guidelines also state that the Commission can make “appropriate disclosures” if it deems such actions in the public interest.
Alaila added that Microsoft “learned of this information demand, like the rest of the world, through the Bloomberg story” and not through the FTC. Alaila also claimed that the FTC, when contacted, wouldn’t confirm if the information letter even existed.
Alaila went further, arguing that this leak “appears to be consistent with an unfortunate trend over the last two years of the FTC strategical leaking nonpublic information”. Alaila highlighted a report from September in which the FTC Inspector General found a “steadily increasing” volume of “unauthorised disclosures” of nonpublic information to media.
The FTC declined to comment on Microsoft’s Open Letter.
If Microsoft’s claims are accurate and the FTC did leak to Bloomberg prematurely, it suggests the FTC has broken protocol, as the regulatory agency hadn’t notified its target or finalised its information request.
What Was Reported Last Week?
According to Bloomberg sources, a key focus of the investigation is Microsoft’s bundling of productivity and security software with its Azure cloud services. Specifically, the FTC is examining claims that Microsoft’s licensing terms are punitive, hindering customers from transferring business data to competing platforms.
The FTC’s scrutiny of Microsoft’s cloud business has also intensified in light of several security incidents involving its products. Microsoft’s role as a significant software provider for US government agencies adds to this focus. In April, the US Cyber Safety Review Board (CSRB) criticised Microsoft’s preparedness in preventing the July 2023 Storm-0558 cyberattack, during which Chinese hackers exploited vulnerabilities in Microsoft Exchange Online to breach US government emails.
As emphasised last week, however, this tale has a potential twist. Donald Trump’s election as US president raises expectations that he may appoint a Republican with a more business-friendly approach, leaving the outcome of the prospective investigation into Microsoft uncertain.
However, it is still possible that the probe will continue. During Trump’s previous administration, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) filed significant antitrust lawsuits against Google and Meta, suggesting that a stricter position on big tech could remain in place despite a generally enterprise-friendly outlook.
