FTC builds Microsoft cloud and AI antitrust case as Nvidia, Google rulings reshape scrutiny

The FTC has sent civil investigative demands, documents similar to subpoenas, to at least half a dozen companies that compete with Microsoft, The Verge reported on 1 June. Bloomberg had earlier outlined the contents of those demands. The Verge says it obtained previously unreported details from an industry source who reviewed the letters and was granted anonymity to discuss nonpublic information. The publication verified the document.

There is no guarantee the investigation ends in a lawsuit. It began under the Biden administration in 2024 and continued under President Donald Trump. After further investigative steps, FTC staff will decide whether to recommend a complaint. The agency's two commissioners would then vote. Both are Republicans. With no minority party commissioners in place, the commission could end the matter quietly, with no formal objection or public announcement.

What the FTC is asking about

The CIDs say the goal of the probe is to determine whether Microsoft used unfair methods of competition in its cloud, software products and related services in violation of the FTC Act, according to the source. The documents generally run more than 15 pages and more than 15 questions, often with extensive sub-parts. They ask about Microsoft's business agreements, licensing arrangements and product interoperability.

Some questions appear aimed at understanding the cloud industry itself: organizational charts, business and marketing plans, product roadmaps, and how companies plan to bundle multiple features and products. Others ask about pricing, discounting and profitability. They probe how hard it is to break into a market Microsoft operates in by examining costs and barriers to entry. The FTC also asks specifically about Microsoft's impact on competition, soliciting documents on the effect of Microsoft's policies or market position, and about overall industry bundling and interoperability practices, including at Microsoft.

The agency asks similar questions about competition around AI products, including what it takes to compete for customers against businesses that combine extra features or services with an AI or software product like Microsoft 365. George Washington University law professor and former FTC chair William Kovacic told The Verge that the questions suggest the agency is trying to determine which key market players to watch and how important tactics like bundling are. The references to AI, he said, could suggest the FTC considers it a potential part of an illegal tying arrangement or an important competitive advantage.

"We are cooperating fully with the FTC and believe our practices promote competition while delivering the innovative products our customers expect."

That is Microsoft spokesperson Alex Haurek, in a statement to The Verge. The FTC did not respond to a request for comment from the publication.

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 Azure. In 2023, Google responded to a broad FTC inquiry into 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 insists the cloud sector is competitive. 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."

Cloud growth has pushed Microsoft's valuation to historic highs and positioned it for the computing requirements of AI, while buoying revenue as hardware including Xbox declined. A 2024 ProPublica investigation, published shortly before the probe was reported, found Microsoft used similar leveraging to gain a foothold across US government agencies after installing free cybersecurity upgrades that came with products running specifically on Azure. Switching away from those products later would be strenuous. Government contracts and cybersecurity were not among the CID topics disclosed to The Verge. Haurek said Microsoft responded to the government's security requests at the time and that agencies were "free to engage with other vendors."

Microsoft's last major antitrust confrontation came more than two decades ago, when a court found it had an illegal PC operating system monopoly. Other regulators are looking at the same cloud questions. The Verge reports that the European Commission, the UK Competition and Markets Authority and the Japan Fair Trade Commission have also been probing the issue.

Other rulings set the tone

The Microsoft scrutiny lands in a crowded antitrust calendar. In April 2025, Ars Technica reported that the remedy phase of Google's search antitrust trial was getting underway, with the Department of Justice seeking to force Google to divest Chrome and unbundle Android. Google had already lost the liability phase, with the court finding it violated the Sherman Antitrust Act by "willfully acquiring and maintaining monopoly power." The DOJ argued that the playing field could not be leveled unless Google gave up Chrome, and planned witnesses from Yahoo, DuckDuckGo and Microsoft. Google called the government's position extreme and rooted in past grievances.

China has run its own case. On Monday 15 September 2025, China's State Administration for Market Regulation said Nvidia had violated the country's antitrust law. This was a preliminary finding that the chipmaker failed to fully comply with provisions attached to its $6.9 billion acquisition of Mellanox Technologies in 2020, which Beijing had conditionally approved. SAMR had reached its conclusion weeks before the announcement, according to two people with knowledge of the matter, and released it then to give China leverage in trade talks with the US in Madrid. The preliminary findings could lead to fines of 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.

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

The plaintiffs accept that AI development should slow for safety, but call Anthropic founder Dario Amodei's cooperation proposal a "shortcut" that "substitutes collective restraint for individual accountability." 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." 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 to wait for an antitrust exemption or legislation to begin that work. The Trump administration rejected the idea, with the president saying, "AI taking over the World, destroying Humanity, and all other things bad, is a HOAX." Chinese state media also criticized the proposal; China Daily called it a "club whose membership rules have been drafted before the guest list is announced."

Enforcement politics have shifted too. At Y Combinator's Little Tech Summit in May 2025, The Verge reported, FTC chair Andrew Ferguson and DOJ antitrust officials appeared while deliberately shunning the American Bar Association's spring antitrust meeting across the street, the first time any administration had done so. Ferguson had recently declared his opposition to maintaining the FTC as an independent agency. Lina Khan, his progressive predecessor, slammed Trump for firing two Democratic FTC commissioners and then posed for a photo with Steve Bannon. A DOJ attorney on stage declared it the era of MAGA antitrust. Sen. Josh Hawley kept threatening Meta, saying that Zuckerberg's promises on censorship did not mean "you get to violate antitrust laws."

For Microsoft, the immediate question is narrower than any of that. The FTC is still gathering information, not alleging a violation. Its two commissioners will decide whether the evidence justifies a complaint. The last time the company faced that decision, it lost.