The Federal Trade Commission has launched an investigation into Microsoft's cybersecurity dealings with the U.S. government, examining potential antitrust violations in how the tech giant secured contracts with federal agencies.
The probe centers on Microsoft's response to the 2020 SolarWinds cyberattack, when the company offered its premium security products to various government departments. While these solutions were initially provided at no cost, they later triggered substantial subscription fees once trial periods expired.
According to reports, federal agencies had become heavily invested in Microsoft's ecosystem by the time payments were due, making transitions to alternative providers like Google or Amazon Web Services practically impossible. The FTC is particularly focused on Microsoft's cloud platform Azure, as government divisions using it subsequently purchased additional Azure-compatible products.
A former Microsoft sales representative likened the strategy to fostering customer dependency. Critics argue this approach not only eliminates market competition but also creates concerning security vulnerabilities by concentrating federal digital infrastructure within a single provider's system.
The investigation questions whether Microsoft circumvented standard government procurement procedures. Traditional competitive bidding processes might have resulted in lower costs and improved security through diverse solutions. The FTC has issued a subpoena requiring Microsoft to provide detailed information about these arrangements.
Questions have also emerged about the legality of Microsoft's initial free offerings, though the company maintains these were legitimate contract discounts. The tech giant faces scrutiny for marketing its premium subscriptions as a solution to the SolarWinds breach, despite having previously ignored warnings about the vulnerability that enabled the attack.
As the investigation unfolds, the FTC's ability to clearly define the nature of these agreements and their competitive implications may determine the outcome of this case.