Out of all the things that the Biden Administration has left to do before they are shown the door… they’ve just made it clear that “sticking it” to Microsoft is at the top of the list.

(Source: Giphy) 

In short, FTC is back for one last ‘hurrah’ with Big Tech, and this time they’ve got their sights on Microsoft’s cloud business. Why? Well because apparently, the agency isn’t too thrilled with how Microsoft’s been handling its Azure cloud platform—specifically, it’s not loving the whole “we own you now” vibe Microsoft seems to be giving well, everyone. 

According to reports, the FTC is getting ready to investigate whether Microsoft’s been abusing its power by making it annoyingly hard (and expensive) for users to switch to a different cloud service (a.k.a. The whole “you can leave, but it’ll cost you” routine). For example, Microsoft has allegedly been hiking up subscription fees for anyone daring to jump ship and slapping on exorbitant exit fees for good measure.

(Source: Reuters) 

Now is this whole thing really that shocking? Not really, in fact this just sounds like another edition of the FTC’s greatest hits over the years. Under Chair Lina Khan, the agency’s been going after Big Tech like it’s a personal vendetta. They’ve blocked mergers, taken swings at monopolies, and made life generally unpleasant for companies like Meta, Amazon, and, of course, Microsoft. 

Meaning, Khan’s tenure has been, let’s say, ‘active’. She’s been the regulatory equivalent of my mom who grounded me for being “guilty by association”. Whereas, within the last few years, the FTC has blocked Nvidia’s merger with Arm, shut down Lockheed Martin’s planned buyout of Aerojet, and, most famously, tried to stop Microsoft’s $69 billion Activision Blizzard deal. Spoiler alert: that one didn’t stick, but hey, points for effort, amirite? 

(Source: CBS News) 

But, but, but… why the bone to pick with Microsoft and it’s cloud computing? Well put simply, cloud computing is a bigly deal—like, $561 billion big in 2023. And it’s only getting bigger, with projections pushing the market to $675 billion this year (and poised to reach $2 trillion by 2023).

(Source: Goldman Sachs) 

And when it comes to Microsoft, they’ve got about 20% of the market on lockdown, which puts them in second place behind Amazon, who’s sitting pretty with 31%. Oh and then there’s Google, in third with 11%, trying not to look too disappointed.

Now again, Microsoft is sitting in hot water with exit fees and price hikes, but what’s really got the FTC horned up is the fact that Microsoft has apparently been handing out discounts—BUT only if you stick exclusively with them. It’s kind of like getting a loyalty card at your local café, except instead of free coffee, you get locked into Microsoft’s ecosystem… forever (kinda joking, kinda not). 

(Source: Giphy) 

In addition, it’s not just the U.S. that’s about to get in a pissing match with Microsoft. For instance, regulators in the UK are also sniffing around Microsoft’s cloud business, especially after customers started complaining about being “locked in” with no easy way out. Meanwhile, over in Europe, Microsoft managed to dodge a formal antitrust probe by throwing $21 million at a smaller cloud provider. Meaning, nothing says “we’re totally innocent” like paying off your accusers LOL.

What’s more is that the timing couldn’t be better (or worse, depending on how you look at it). Cloud services are booming, thanks to AI and companies outsourcing everything from data storage to computing power. And with Microsoft holding a decent chunk of the market, any hiccup in their business could send ripples through the industry. Naturally, Microsoft is trying to avoid that at all costs—which may explain the “stick with us or else” strategy.

(Source: Giphy) 

But still, at the end of the day, this is just another chapter in the ongoing dilemma of Big Tech vs. regulators. Sure, Microsoft’s cloud business is massive, but that only makes it a bigger target for the FTC. 

Now whether this investigation will actually lead to anything meaningful is anyone’s guess. After all, Microsoft’s been through this rodeo before, and they’ve got the resources to fend off regulators with a well-timed settlement or two. In the meantime, this is just another day in Tech - and another Friday that leaves us all biting our nails anxiously waiting on what the hell happens next. 

So place your bets accordingly, friends and as always - stay safe and stay frosty! Until next time…

P.S. Life comes at you fast friends, and while your favorite online stock guru is out here struggling to make heads or tails on the markets short-term direction - our team and our premium members at Stocks.News are absolutely CRUSHING it. How so? Well it all comes down to back-to-back-to-back-to-back-to-back massive wins over the last few weeks. Don’t believe me? Click here to see for yourself when we drop the next one.

Stocks.News holds positions in Microsoft, Amazon, Meta, and Google as mentioned in the article.