The U.S. Federal Trade Commission has opened a broad antitrust investigation into Microsoft, including of its software licensing and cloud computing businesses, a source familiar with the matter said on Wednesday.

The probe was approved by FTC Chair Lina Khan ahead of her likely departure in January. The election of Donald Trump as U.S. president, and the expectation he will appoint a fellow Republican with a softer approach toward business, leaves the outcome of the investigation up in the air.

The FTC is examining allegations the software giant is potentially abusing its market power in productivity software by imposing punitive licensing terms to prevent customers from moving their data from its Azure cloud service to other competitive platforms, sources confirmed earlier this month.

The FTC is also looking at practices related to cybersecurity and artificial intelligence products, the source said on Wednesday.

Microsoft declined to comment on Wednesday.

Competition complains about practices

Competitors have criticized Microsoft’s practices they say keep customers locked into its cloud offering, Azure. The FTC fielded such complaints last year as it examined the cloud computing market.

NetChoice, a lobbying group that represents online companies such as Amazon and Google, which compete with Microsoft in cloud computing, criticized Microsoft’s licensing policies, and its integration of AI tools into its Office and Outlook.

“Given that Microsoft is the world’s largest software company, dominating in productivity and operating systems software, the scale and consequences of its licensing decisions are extraordinary,” the group said.

Google in September complained to the European Commission about Microsoft’s practices, saying it made customers pay a 400% mark-up to keep running Windows Server on rival cloud computing operators, and gave them later and more limited security updates.

The FTC has demanded a broad range of detailed information from Microsoft, Bloomberg reported earlier on Wednesday.

The agency had already claimed jurisdiction over probes into Microsoft and OpenAI over competition in artificial intelligence and started looking into Microsoft’s $650 million deal with AI startup Inflection AI.

Other companies faced accusations

Microsoft has been somewhat of an exception to U.S. antitrust regulators’ recent campaign against allegedly anticompetitive practices at Big Tech companies.

Facebook owner Meta Platforms, Apple and Amazon.com Inc. have all been accused by the U.S. of unlawfully maintaining monopolies.

Alphabet’s Google is facing two lawsuits, including one where a judge found it unlawfully thwarted competition among online search engines.

Microsoft CEO Satya Nadella testified at Google’s trial, saying the search giant was using exclusive deals with publishers to lock up content used to train artificial intelligence.

It is unclear whether Trump will ease up on Big Tech, whose first administration launched several Big Tech probes. JD Vance, the incoming vice president, has expressed concern about the power the companies wield over public discourse.

Still, Microsoft has benefited from Trump policies in the past.

In 2019, the Pentagon awarded it a $10 billion cloud computing contract that Amazon had widely been expected to win. Amazon later alleged that Trump exerted improper pressure on military officials to steer the contract away from its Amazon Web Services unit.
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MELBOURNE, AUSTRALIA — Australia’s House of Representatives on Wednesday passed a bill that would ban children younger than 16 years old from social media, leaving it to the Senate to finalize the world-first law.

The major parties backed the bill that would make platforms including TikTok, Facebook, Snapchat, Reddit, X and Instagram liable for fines of up to $33 million for systemic failures to prevent young children from holding accounts.

The legislation passed 102 to 13. If the bill becomes law this week, the platforms would have one year to work out how to implement the age restrictions before the penalties are enforced.

Opposition lawmaker Dan Tehan told Parliament the government had agreed to accept amendments in the Senate that would bolster privacy protections. Platforms would not be allowed to compel users to provide government-issued identity documents including passports or driver’s licenses. The platforms also could not demand digital identification through a government system.

“Will it be perfect? No. But is any law perfect? No, it’s not. But if it helps, even if it helps in just the smallest of ways, it will make a huge difference to people’s lives,” Tehan told Parliament.

Communications Minister Michelle Rowland said the Senate would debate the bill later Wednesday. The major parties’ support all but guarantees the legislation will pass in the Senate, where no party holds a majority of seats.

Lawmakers who were not aligned with either the government or the opposition were most critical of the legislation during debate on Tuesday and Wednesday.

Criticisms include that the legislation had been rushed through Parliament without adequate scrutiny, would not work, would create privacy risks for users of all ages and would take away parents’ authority to decide what’s best for their children.

Critics also argue the ban would isolate children, deprive them of positive aspects of social media, drive children to the dark web, make children too young for social media reluctant to report harms they encountered and take away incentives for platforms to make online spaces safer.

Independent lawmaker Zoe Daniel said the legislation would “make zero difference to the harms that are inherent to social media.”

“The true object of this legislation is not to make social media safe by design, but to make parents and voters feel like the government is doing something about it,” Daniel told Parliament.

“There is a reason why the government parades this legislation as world-leading, that’s because no other country wants to do it,” she added.

The platforms had asked for the vote on legislation to be delayed until at least June next year when a government-commissioned evaluation of age assurance technologies made its report on how the ban could been enforced.

Melbourne resident Wayne Holdsworth, whose 17-year-old son Mac took his own life last year after falling victim to an online sextortion scam, described the bill as “absolutely essential for the safety of our children.”

“It’s not the only thing that we need to do to protect them because education is the key, but to provide some immediate support for our children and parents to be able to manage this, it’s a great step,” the 65-year-old online safety campaigner told The Associated Press on Tuesday.

“And in my opinion, it’s the greatest time in our country’s history,” he added, referring to the pending legal reform.
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SYDNEY — Google and Facebook-owner Meta Platforms urged the Australian government on Tuesday to delay a bill that will ban most forms of social media for children under 16, saying more time was needed to assess its potential impact.

Prime Minister Anthony Albanese’s center-left government wants to pass the bill, which represents some of the toughest controls on children’s social media use imposed by any country, into law by the end of the parliamentary year on Thursday.

The bill was introduced in parliament last week and opened for submissions of opinions for only one day.

Google and Meta said in their submissions that the government should wait for the results of an age-verification trial before going ahead.

The age-verification system may include biometrics or government identification to enforce a social media age cut-off.

“In the absence of such results, neither industry nor Australians will understand the nature or scale of age assurance required by the bill, nor the impact of such measures on Australians,” Meta said.

“In its present form, the bill is inconsistent and ineffective.”

The law would force social media platforms, and not parents or children, to take reasonable steps to ensure age-verification protections are in place. Companies could be fined up to $32 million for systemic breaches.

The opposition Liberal party is expected to support the bill though some independent lawmakers have accused the government of rushing through the entire process in around a week.

A Senate committee responsible for communications legislation is scheduled to deliver a report on Tuesday.

Bytedance’s TikTok said the bill lacked clarity and that it had “significant concerns” with the government’s plan to pass the bill without detailed consultation with experts, social media platforms, mental health organizations and young people.

“Where novel policy is put forward, it’s important that legislation is drafted in a thorough and considered way, to ensure it is able to achieve its stated intention. This has not been the case with respect to this Bill,” TikTok said.

Elon Musk’s X raised concerns that the bill will negatively impact the human rights of children and young people, including their rights to freedom of expression and access to information.

The U.S. billionaire, who views himself as a champion of free speech, last week attacked the Australian government saying the bill seemed like a backdoor way to control access to the internet.
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