The Federal Trade Commission (FTC) is reportedly investigating Microsoft like it was in 1998. In the final days of the Biden administration, the investigation into outgoing Chairwoman Lina Khan is said to have picked up steam ProPublica. The FTC is particularly concerned about Microsoft’s bundling of ubiquitous products Office products with cybersecurity and cloud computing services. That includes a deal to temporarily update state packages that essentially resulted in using a state cybersecurity crisis to sell more licenses.
It adds more detail to reports Bloomberg and the Financial Times in November about an FTC investigation into the Windows maker. According to the publications, Microsoft’s competitors complained that bundling its popular software with cloud services made it harder to compete. ProPublica says FTC lawyers have recently discussed and scheduled meetings with Microsoft competitors.
Microsoft has confirmed this ProPublica that the FTC issued a civil investigative demand (essentially a subpoena) forcing the company to release information related to the case. A Microsoft spokesperson told the publication – without giving specific examples – that the FTC document is “broad and far-reaching, requiring that things that are beyond the realm of possibility even be logical.”
The investigation follows a separate one ProPublica report in November about how Microsoft appeared to be exploiting a series of cyberattacks to sell more licenses to the US government. After meeting with President Biden in the summer of 2021, the company reportedly 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 upgrades and train employees on how to use them.
Many branches of the U.S. government agreed – including all of the Defense Department’s military services – and then began paying for the more expensive packages after the trial ended. (The hassle of switching to another cybersecurity product after the trial period ended was virtually a guarantee.) ProPublicas The account essentially represents that Microsoft is exploiting a cybersecurity crisis to increase sales and improve its bottom line. Y’all, these are just late capitalism things.
Ironically, the sales tactic resulted from security vulnerabilities from – you guessed it – Microsoft. Biden’s call for Big Tech leaders to increase government cybersecurity came in the wake of the SolarWinds attack exploited a vulnerability in a Microsoft identity service. The company reportedly knew the app contained a “security nightmare” that allowed hackers to impersonate legitimate employees and sniff out sensitive information without arousing suspicion. But fixing the bug would create more friction in government filings as the company competes for U.S. contracts. Microsoft reportedly chose to keep quiet rather than risk losing business.
According to experts spoken to ProPublicaThe government test sales program may have violated contract and competition rules. The publication reported that even Microsoft’s lawyers feared the deal would raise antitrust concerns.
If this sounds familiar, it reflects that of the government 1998 antitrust lawsuit against Microsoft. Bundling was also a star of this show, with the FTC accusing the company of engaging in anti-competitive practices by including Internet Explorer in Windows, a move that was seen as oppressive in those early days of the Internet Competitors like Netscape.
