The Federal Trade Commission (FTC) is currently investigating Microsoft for potential anticompetitive practices, specifically in the cloud market. Lina Khan, the chair of the FTC, has announced that the agency will be looking into Microsoft's activities in this sector.
Government as a Potential Target
A recent report by ProPublica has suggested that the government itself may have been a target of Microsoft's anticompetitive practices. This comes in the wake of the SolarWinds hack that affected multiple government agencies in 2020.
Microsoft's Deal with the Government
Microsoft made a significant pledge to the government in the summer of 2021, offering $150 billion over five years to enhance digital security. While government services usually go through a competitive bidding process, Microsoft's deal offered attractive terms that were hard to resist.
As part of the deal, Microsoft provided the government with free access to its G5 security capabilities for the first year, along with consultancy services for product installation. However, once an agency committed to Microsoft's services, switching to a competitor became challenging due to steep fees imposed by Microsoft.
A Microsoft sales representative revealed that the company's objective was to promote Azure by making it difficult for customers to transition to a rival service provider like Amazon.
Legal and Antitrust Concerns
Legal experts have raised concerns about the deal, suggesting that it may violate antitrust laws and regulations against gratuitous service agreements. While some argue that the government should have explored other vendor options through a competitive bidding process, others believe that Microsoft's actions were within legal boundaries.
Peter Cohan, an associate professor at Babson College, pointed out that the government had the opportunity to consider alternative cybersecurity vendors before committing to Microsoft's services. He highlighted that exploring other options could have potentially saved costs for the government.
Microsoft has yet to comment on the ongoing investigation by the FTC. However, Steve Faehl, the company's security leader for federal business, stated that Microsoft's primary focus was to address urgent security concerns raised by the government against sophisticated cyber threats.
For more details, you can refer to the original article on Business Insider.
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By: lvaranasi@insider.com (Lakshmi Varanasi)
Title: FTC Investigating Microsoft for Anticompetitive Practices in the Cloud Market
Sourced From: www.businessinsider.com/microsoft-anti-competitive-practices-ftc-khan-biden-big-tech-2024-11
Published Date: Sun, 24 Nov 2024 19:08:52 +0000
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