The Federal Trade Commission is increasing its scrutiny of Microsoft’s cloud computing licensing and bundling practices, a move that echoes ongoing concerns in Europe about the tech giant’s market dominance. While the European Commission has already launched investigations into Amazon and Microsoft’s cloud services, the FTC’s focus centers on allegations that Microsoft is unfairly leveraging its position in the US market through restrictive licensing terms and product tying, particularly with Microsoft 365.
The core of the issue revolves around Microsoft’s “Listed Providers” program and its “License Mobility” program. According to details shared with Computerworld, Microsoft doesn’t allow its on-premises software to be deployed on dedicated hosted cloud services offered by competitors like Amazon, Google, and Alibaba without requiring customers to purchase “mobility rights” and Software Assurance (SA), a volume licensing support add-on. This effectively raises the cost and complexity for businesses wanting to utilize competing cloud infrastructure.
This practice, critics argue, creates a barrier to entry for smaller cloud providers and limits customer choice. Microsoft, according to reports, “strategically” excludes key products – including Windows Server, Visual Studio, Windows desktop OS, Microsoft Office, and Microsoft 365 – from its License Mobility program, which would otherwise allow customers to more easily move workloads to different cloud environments. The change, implemented in October 2019, restricted the ability to deploy these products in dedicated cloud environments to licenses purchased with SA and mobility rights. This restriction, it’s important to note, applies specifically to Listed Providers and doesn’t extend to traditional outsourcing services.
FTC Investigation Follows European Scrutiny
The FTC’s deeper look into Microsoft’s practices comes as European regulators are already actively investigating the company’s cloud business under the Digital Markets Act (DMA). The European Commission opened three market investigations in November 2025, two of which specifically assess whether Amazon and Microsoft should be designated as “gatekeepers” for their cloud services, Amazon Web Services and Microsoft Azure, respectively. This designation would subject them to stricter regulations aimed at promoting competition.
The DMA investigations aim to determine if Microsoft and Amazon act as crucial gateways between businesses and consumers, even if they don’t meet the traditional size and market position thresholds for gatekeeper status. A separate investigation will evaluate the effectiveness of the DMA in tackling anti-competitive practices within the cloud computing sector in the EU, including issues like interoperability, data access, and tying/bundling of services.
Concerns Over Product Tying and Microsoft 365
Allegations of product tying, particularly concerning Microsoft 365, are a recurring theme in the US. Product tying occurs when a company requires customers to purchase a second product in order to obtain a desired product, potentially stifling competition. The FTC’s investigation will likely examine whether Microsoft is leveraging its dominance in operating systems and productivity software to gain an unfair advantage in the cloud market.
The concerns raised by industry observers highlight a disparity in regulatory approaches. As one source pointed out, the “half-hearted measures” being taken in the EU do not extend to US-based Microsoft customers. This leaves American businesses potentially vulnerable to the same restrictive licensing practices that European regulators are attempting to address.
The Impact on Cloud Providers
The restrictions imposed by Microsoft’s licensing programs disproportionately affect smaller cloud providers who rely on offering competitive pricing and flexibility to attract customers. By requiring mobility rights and Software Assurance, Microsoft effectively increases the cost of running its software on these platforms, making it more demanding for them to compete with Microsoft Azure and other larger cloud providers.
This situation also impacts businesses that prefer a multi-cloud strategy, where they distribute their workloads across multiple cloud providers to mitigate risk and optimize performance. Microsoft’s licensing terms can make it more challenging and expensive to implement such a strategy, potentially locking customers into the Microsoft ecosystem.
What’s Next?
The FTC has not publicly announced a timeline for its investigation, but This proves expected to involve gathering information from Microsoft and its customers, as well as analyzing the company’s licensing agreements and business practices. The outcome of the investigation could range from a negotiated settlement with Microsoft to a formal enforcement action, potentially including fines or changes to Microsoft’s licensing terms.
The European Commission’s investigations are also ongoing, with a decision on whether to designate Amazon and Microsoft as gatekeepers expected in the coming months. The results of these investigations could have significant implications for the future of cloud computing, shaping the competitive landscape and determining the extent to which regulators will intervene to promote fairness and innovation. For updates on the European Commission’s investigations, visit the Digital Markets Act website.
This increased regulatory pressure on Microsoft underscores the growing importance of cloud computing and the require for a level playing field in the industry. As more businesses migrate to the cloud, ensuring fair competition and preventing anti-competitive practices will be crucial for fostering innovation and delivering benefits to consumers.
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