Microsoft's dark side: market power draws growing scrutiny
AI made Microsoft the world's most valuable company. But regulators, partners and customers are watching it with growing suspicion – as a new case in Brussels shows.
What is at stake
Apple, Amazon, Alphabet, Meta – they have all faced antitrust proceedings in recent years. Microsoft has not. The Redmond-based company spent years ruling with a rhetoric of partnership, open-source gestures and political finesse. This week the European Commission accused the software maker of a competition law violation. The shield has developed cracks.
The Teams case
The trigger is Microsoft’s bundling of its Teams communication service with its Office productivity software. Rivals such as Slack see it as an unfair competitive advantage. Some in the industry draw a comparison with the 1990s, when Microsoft pre-installed Internet Explorer and drove Netscape out of the market. That episode led to one of the harshest antitrust cases in US history – and, for a time, to serious discussion of breaking the company up.
The difference from then
Today Microsoft provides digital baseline infrastructure for business and government through Windows, Office and the Azure cloud platform. Add to that the AI partnership with OpenAI – Microsoft is the dominant enterprise provider in this key technology. The market capitalisation: almost 3.4 trillion dollars. No company in history has ever been worth as much. The question is: is this company reverting to old-era tactics to extend its dominance? Or will Satya Nadella answer the power question differently from predecessors Gates and Ballmer?
Where the shift in sentiment is coming from
The criticism is not only coming from Brussels. Partners report pressure on cloud contracts; customers describe opaque licensing models; regulators in several countries are examining Microsoft’s practices. Brad Smith, the company’s president and chief political diplomat, has already promised “solutions to the concerns” of the competition watchdogs. The mood has shifted across three distinct fronts, as Handelsblatt traces.
I wrote the full piece together with Felix Holtermann and Christof Kerkmann for Handelsblatt.