While we are still in the early days of the “Age of AI,” it is clear that whichever companies come to dominate this sector in the coming years will hold massive sway over all of our lives and businesses going forward. That’s why it’s so important that the big players in this space be forced to compete fairly.
Thankfully, the Trump administration is doing just that by continuing the antitrust probe first brought against Microsoft by the Biden administration. Trump’s FTC is investigating Microsoft’s alleged anti-competitive behavior, with regulators focusing on how the company achieved its rapid advancement in the AI space as well as its restrictive software licensing practices. Given Microsoft’s concerning history of anticompetitive behavior and cybersecurity failures, it is crucial that Trump keep up the pressure on Microsoft.
According to recent reporting from Bloomberg, the FTC’s probe into Microsoft has focused, in part, on Microsoft’s massive investment in ChatGPT-maker OpenAI, a move which some believe hurt competition in the burgeoning AI market. Earlier this year, FTC Chair Andrew Ferguson said that investigating the tech sector would be his highest priority, and so far, he is sticking to his word.
It appears the FTC is interested in why Microsoft canceled some of its own AI work after choosing to invest in OpenAI. Their investment wasn’t disclosed to competition regulators ahead of time. The FTC likely thinks that Microsoft structured the massive deal as a partnership in order to avoid a merger investigation.
Even more than the AI component, investigators also want to know more about Microsoft’s cloud-computing business and the licensing terms users are forced to agree to. There has long been concern that the company’s licensing terms effectively lock customers into their products by making it difficult and expensive to leave, driving down competition.
The AI services of Microsoft are deeply embedded within its Azure cloud platform. Organizations that use Azure are forced to use Microsoft’s AI offerings because third-party applications are restricted, blocking seamless integration, which creates barriers for new AI companies to enter the market.
Microsoft’s growing suite of bundled software offerings make it so anyone wishing to use must-have products like Microsoft Access must also accept dozens of ancillary applications. This makes it harder for competitors like Zoom, Slack and others, to compete. For example, Microsoft bundles their Teams messaging application into Windows 11 and forces it on users as the operating system’s primary collaboration tool. Users are also forced to open links from Office and Teams in Microsoft’s Edge browser, even if the user sets a competitor’s browser as their default.
To achieve maximum value, businesses must accept the entire Microsoft ecosystem through its licensing structures. Microsoft uses this advantage to prevent competitors from gaining traction which reduces innovation and restricts market options for consumers.
As Microsoft pushes its way deeper into our lives, businesses, and government agencies, I worry about the implications for national security. After all, the company has received backlash for its acquiescence to the Chinese government, handing over sensitive source code, encryption keys, and backdoor access. We’ve already seen how this access has led to the leak of U.S. AI intellectual property to China, including OpenAI’s models and algorithms.
The government should force Microsoft to end its anticompetitive behavior and allow a flourishing, free marketplace for software and AI products in the U.S. Our leaders can do so both through the formal FTC investigation, as well as by passing laws and regulations that curtail the impact of such restrictive licensing on government agencies. This would go a long way toward forcing Microsoft to end its anticompetitive practices. Doing so will not only make our tech sector more competitive and innovative, but will also keep America from becoming solely reliant on a company that acquiesces to our largest rivals abroad.
Leif Larson is a distinguished strategist with two decades of experience in PR, public affairs, and politics. His expertise in media and digital communications has been a driving force behind the success of influential political, corporate, and advocacy groups nationwide throughout his career.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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