FTC Launches Broad Antitrust Probe Into Microsoft
Microsoft stock fell 0.8% early Friday following news of a Federal Trade Commission (FTC) antitrust investigation into the tech giant. The probe, revealed late Wednesday, focuses on Microsoft’s bundling of cloud services with its productivity and security software. Analysts see this as a parting move by FTC Chair Lina Khan, who has aggressively pursued Big Tech companies, including Apple and Alphabet.
Analyst Predicts Limited Impact on Microsoft
Wedbush analyst Dan Ives described the investigation as “much more bark than bite,” predicting its significance will fade under Trump’s administration. Ives highlighted that Lina Khan’s departure as FTC Chair could mark the end of stricter regulatory actions against Big Tech. “This investigation is likely a final move before major policy shifts in favor of technology firms,” Ives noted.
Antitrust Scrutiny on Big Tech Intensifies
The FTC probe is part of a broader trend of antitrust actions targeting tech giants. Apple, Microsoft, and Alphabet have all underperformed the S&P 500 this year, partly due to legal challenges. Alphabet faces severe scrutiny, with a federal judge finding its Google search engine an illegal monopoly. The DOJ has even suggested divesting its Chrome browser and Android operating system.
Shifting Regulatory Landscape Under Trump
Following Trump’s election win, investor optimism suggests antitrust scrutiny will ease, benefiting companies like Microsoft. Legal experts, however, caution that significant regulatory changes may take time. The Trump administration is expected to appoint a new FTC leader, potentially shifting focus away from Big Tech.
Microsoft’s History of Navigating Antitrust Challenges
Microsoft is no stranger to antitrust probes, having weathered a landmark legal battle with the U.S. government in the 1990s. Analysts believe that, similar to past experiences, Microsoft will negotiate any necessary remedies to resolve current concerns. “Remedies this time are expected to be far less severe than in previous decades,” Ives stated.
What the FTC Probe Means for Microsoft
The FTC’s inquiry raises questions about how Microsoft bundles its services, a practice central to its market dominance. While the investigation could lead to recommendations for unbundling or other changes, analysts believe these measures will be manageable for Microsoft. Investor sentiment remains cautiously optimistic, with many expecting limited disruption to Microsoft’s core business operations.