What you need to know
- Rima Alaily, Corporate Vice President and Deputy General Counsel, Microsoft published a letter on LinkedIn accusing the FTC of leaking confidential information about Microsoft to the press.
- The fallout comes after Bloomberg (later, Reuters) published a story last week saying the FTC was gearing up for an antitrust investigation against Microsoft, unbeknownst to Microsoft.
- Microsoft still hasn’t received notice of an “information demand” that it is being investigated despite requesting clarification from the FTC.
The controversial FTC under Chair Lina Khan is generating more news this week, not because it’s going after another major company, but because of improper behavior, switching the tables on the regulatory agency.
The issue starts with a Bloomberg report last week stating the FTC had “opened an antitrust investigation” of Microsoft and an information demand to Microsoft “hundreds of pages long.” The target of the investigation is allegedly Microsoft’s dominance in “cloud computing and software bundles to cybersecurity offerings and artificial intelligence products.”
More shocking, despite the news that Microsoft was being asked for information for the FTC’s antitrust investigation, a week later, the company received no FTC letter or response when Microsoft inquired about the story’s validity and the alleged antitrust information request.
According to Rima Alaily, Corporate Vice President and Deputy General Counsel, Microsoft published an open letter on LinkedIn noting that the company “learned of this information demand, like the rest of the world, through the Bloomberg story” and not the FTC.
Yikes.
Alaily throws more tinder on the fire, remarking that this leak “appears to be consistent with an unfortunate trend over the last two years of the FTC strategical leaking nonpublic information,” and she strongly urges the FTC “…to investigate this most recent incident fully and to make your findings public as promptly as possible.”
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Trust in the FTC is waning, and the future of Microsoft is unclear
One week after the Bloomberg story, it’s fascinating that the only people who apparently know that Microsoft is being allegedly investigated are the FTC and Bloomberg, not Microsoft. This suggests the leak was premature as the regulatory agency hadn’t notified its target or finalized its information request.
None of this is good for the FTC, which, despite doing some great work over the years to protect consumers, has often blundered some big cases, like trying to block Microsoft’s acquisition of Activision-Blizzard. Moreover, this trend of targeting the leaking of materials to the press to control the narrative calls into question the fairness and integrity of the agency, as Alaily correctly points out.
As my colleague, Jez Corden, noted last week, with Donald Trump’s election as the next US President, nothing is certain anymore regarding regulations (which are promised to be slashed) and antitrust investigations, at least against Microsoft. For all we know, this could all go away as Microsoft has not been publicly called out by the incoming president, unlike Google (already facing the possibility of selling off Chrome, Amazon, and others.
That said, Trump tech bro and confidant Elon Musk has spoken publicly against Microsoft and, in fact, has named them in a lawsuit against OpenAI in the past few weeks. Musk has even attacked Apple over its App Store fees and its advertising boycott on X.
Industry insiders think that whoever “wins” the AI race—namely the US or China—will dominate the next century in technology. Currently, the US has a massive lead over China, but some are worried that if the US government hobbles its own companies that are advancing and popularizing AI, it will give China an advantage the US cannot afford. Going after Microsoft in a protracted antitrust case, some of which allegedly involves its AI products, would only hurt the US.
Of course, all of this must be balanced with AI safety and proposed regulation so that AI does not “doom humanity. “
It will be fascinating to see where this all goes in 2025, but the current thinking is that the next administration will be much more laissez-faire regarding corporate regulation. Until then, like Microsoft, we’ll have to see what exactly the FTC is planning.
