*

Competitors complain Microsoft ( MSFT ) locks customers into its

cloud

service

*

FTC earlier set the stage for probe into Microsoft's ( MSFT ) role

in AI

market

*

Investigation's future uncertain under Trump

administration

(Adds expert comment in paragraphs 17-18)

By Jody Godoy

Nov 27 (Reuters) - The U.S. Federal Trade Commission has

opened a broad antitrust investigation into Microsoft ( MSFT ),

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 ( MSFT ) declined to comment on Wednesday.

Competitors have criticized Microsoft's ( MSFT ) 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

including Amazon ( AMZN ) and Google, which compete with Microsoft ( MSFT ) in

cloud computing, criticized Microsoft's ( MSFT ) licensing policies, and

its integration of AI tools into its Office and Outlook.

"Given that Microsoft ( MSFT ) 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 ( MSFT ) 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 ( MSFT ), Bloomberg reported earlier on Wednesday.

The agency had already claimed jurisdiction over probes into

Microsoft ( MSFT ) and OpenAI regarding competition in artificial

intelligence, and started looking into Microsoft's ( MSFT ) $650 million

deal with AI startup Inflection AI.

Microsoft ( MSFT ) 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 ( META ), Apple ( AAPL ), and

Amazon.com Inc. ( AMZN ) 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 ( MSFT ) 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.

"The Trump administration was an aggressive enforcer of the

antitrust laws," said Andre Barlow, a lawyer with Doyle Barlow &

Mazard, noting it filed suits against Google and Facebook.

"When administrations change, the agencies do not

necessarily drop ongoing investigations," he added, noting that

"changes in administration can lead to evolving enforcement

priorities and shifts in how aggressively certain types of

conduct are scrutinized."

Still, Microsoft ( MSFT ) has benefited from Trump policies in the

past.

In 2019, the Pentagon awarded it a $10 billion cloud

computing contract that Amazon ( AMZN ) had widely been expected to win.

Amazon ( AMZN ) later alleged that Trump exerted improper pressure on

military officials to steer the contract away from its Amazon

Web Services unit.