The FTC’s antitrust investigation into Microsoft is reportedly focused on software bundling

The FTC is said to be investigating Microsoft as it did in 1998. In the final days of the Biden administration, the investigation by outgoing Chair Lena Khan is said to be gaining momentum, according to ProPublica. The FTC is particularly concerned with Microsoft’s per-venue aggregation Office products With cybersecurity and cloud computing services. This includes a deal to upgrade government packages for a limited time, which had the effect of essentially using the government’s cybersecurity crisis to sell more licenses.

Adds more detail to reports from Bloomberg and Financial Times In November regarding the FTC’s investigation into the Windows maker. The publications said that Microsoft’s competitors complained that bundling its popular software with cloud services made competition more difficult. ProPublica FTC lawyers say they recently interviewed and held meetings with Microsoft’s competitors.

Microsoft confirmed to ProPublica The FTC issued a civil investigative order (essentially a subpoena), forcing the company to hand over information related to the case. A Microsoft spokesperson told the publication — without providing examples on the record — that the FTC document is “broad, and asks for things outside the realm of possibility to make sense.”

A separate investigation will follow ProPublica report From November about how Microsoft appears to be exploiting a series of cyberattacks to sell more licenses to the US government. After a meeting with President Biden in the summer of 2021, the company reportedly offered to upgrade the government’s existing packages (including Windows and its Office suite) to a more expensive version that added its advanced cybersecurity products. Microsoft also sent consultants to install the upgrades and train employees in their use.

Many departments in the US government accepted this – including all of the Department of Defense’s military services – and then began paying for the more expensive packages after the trial concluded. (The hassle of switching to a different cybersecurity product after the trial ends practically guarantees this will happen.) ProPublica The account essentially portrays Microsoft as exploiting the cybersecurity crisis to expand sales and boost its bottom line. Just late-stage capitalist stuff, y’all.

Ironically, the sales tactic resulted from Microsoft security vulnerabilities. Biden’s request for leaders of major tech companies to beef up government cybersecurity came in the wake of the SolarWinds attack Exploiting a vulnerability in the Microsoft Identity Service. The company reportedly knew that the app contained a “security nightmare” that would allow hackers to impersonate legitimate employees and investigate sensitive information without raising suspicion. But correcting the flaw would add friction to government sign-offs when the company was competing for U.S. contracts. Microsoft reportedly chose to remain silent rather than risk losing business.

According to the experts who spoke ProPublicathe government’s trial sales scheme could have violated contracting and competition regulations. Even Microsoft’s lawyers are concerned that the deal will raise antitrust concerns, the publication reported.

If this sounds familiar, it echoes the government 1998 antitrust lawsuit Against Microsoft. Bundling was also a star of this show, as the Federal Trade Commission accused the company of engaging in anticompetitive practices by including Internet Explorer with Windows, a move seen in those early days of the Internet as stifling Competitors like Netscape.