The FTC is opening an investigation into the Microsoft Corporation (MSFT) and its cloud business, according to a Financial Times report. The regulators are examining allegations that Microsoft 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,” the report says.
Things being examined by the regulators include Microsoft substantially increasing subscription fees for those who leave, charging steep exit fees, and allegedly making its Office 365 products incompatible with rival clouds, according to the report. The U.S. Federal Trade Commission (FTC) will head the upcoming investigation.
There is no shortage of reasons to be optimistic about Microsoft’s potential in the coming years. Although competition has been growing, it is situated to dominate the growing demand for AI and cloud-based computing products. However, could this latest investigation become a steep hurdle for MSFT stock’s future growth?
How Will FTC Investigation Affect Microsoft Stock?
The FTC’s chair Lina Khan has aggressively targeted major corporations that she feels are threats as monopolies, including Microsoft. The latest investigation she has launched will likely be one of her last, as Donald Trump is set to replace her once he enters office next year.
As for how the latest investigation may affect MSFT stock, the answer is not very likely. Microsoft currently has a buy rating according to most stock experts, as it ramps up its efforts in AI technology. Price predictions for the stock’s performance continue to climb, with Q4 expected to bring positive earnings once again for the tech giant.
Furthermore, the rivalry between Microsoft and other Mag-7 tech stocks like Google and Meta only fuels MSFT further. The company’s ability to persevere and avoid letting controversy affect it makes it one of the premium stock options. A similar investigation was filed in 2022 when Microsoft tried to acquire video game developer Activision Blizzard. However, the company continues to perform well in other avenues, only further pumping stock price.
