The U.S. Federal Trade Commission (FTC), under the leadership of Chair Lina Khan, is set to investigate Microsoft’s cloud business amid increasing scrutiny from international regulators [8d1e7fc0]. This investigation comes as the UK's Competition and Markets Authority (CMA) is also probing Microsoft and Amazon due to customer complaints about being 'locked in' to their services [8d1e7fc0]. In the European Union, Microsoft managed to avoid a formal investigation after reaching a multimillion-dollar settlement with rival cloud providers in July 2023 [8d1e7fc0].
Microsoft currently holds a 20% share of the global cloud market, trailing behind Amazon Web Services, which commands 31%, and ahead of Google Cloud at 12% [8d1e7fc0]. The cloud services market has seen significant growth, with spending reaching $561 billion in 2023 and projected to rise to $675 billion in 2024 and $825 billion by 2025 [8d1e7fc0].
The FTC's scrutiny follows its previous attempt to block Microsoft's $75 billion acquisition of Activision Blizzard in 2022, citing concerns over competition in both the gaming and cloud sectors [8d1e7fc0]. Microsoft has accused Google of undermining its position with regulators and attempting to derail its EU settlement [8d1e7fc0].
In the UK, the CMA is conducting a formal probe into Microsoft's artificial intelligence investments, particularly its hiring of former employees from Inflection AI [705e5cc3]. This inquiry will also assess Microsoft's arrangements with Inflection AI, including the involvement of key figures like Mustafa Suleyman and Karen Simonyan [705e5cc3]. The CMA has set a deadline of September 11 for its phase 1 decision regarding this investigation [705e5cc3].
Additionally, the CMA is looking into the overall state of competition in the cloud market, with ongoing investigations into Microsoft's partnerships with OpenAI and Amazon's dealings with Anthropic [705e5cc3]. Microsoft has expressed concerns that the UK's investigation into cloud computing could deter investment and negatively impact the country's digital ambitions [69b38bdd].
Meanwhile, the FTC is also requesting more details from Amazon regarding its deal with AI startup Adept, as part of a broader review of partnerships between Amazon and prominent AI startups [fcd2154f]. This scrutiny reflects a growing concern among regulators about the potential for anticompetitive behavior in the rapidly evolving AI market [705e5cc3] [fcd2154f].
In Japan, the Japan Fair Trade Commission (JFTC) is set to launch a fact-finding survey on the generative AI market, focusing on the concentration of data and resources among major players like Google, Microsoft, Meta, and Nvidia, which dominates the AI-related semiconductor market [24fd6491]. This survey aims to identify antimonopoly issues and promote competition within the sector [24fd6491].
As the landscape of AI and cloud services continues to evolve, regulators in the U.S., Europe, and the UK are increasingly focused on ensuring that big tech companies do not monopolize the market and stifle competition [38c48fdc].