German antitrust regulator intensifies scrutiny of Microsoft’s practices

Germany's anti-cartel watchdog said Monday it had placed US tech giant Microsoft under closer surveillance for any possible abuse of its market position.

The Federal Cartel Office said it had determined Microsoft was "of paramount significance for competition across markets", a move that would allow the watchdog to take action and prohibit "anti-competitive practices".

Microsoft joins Apple, Amazon, Google parent company Alphabet, and Meta in falling under reinforced monitoring made possible by the German Competition Act, which came into force in 2021.

The act allows the watchdog, known in German as the Bundeskartellamt, to intervene earlier, particularly against the world's tech giants.

"Microsoft's many products are omnipresent in companies, authorities and private households and have become indispensable," Bundeskartellamt president Andreas Mundt said in a statement.

The company has had a dominant position with its Windows operating system "for many years now", he said, and has established a very strong presence for its Office products and other software.

Microsoft has also significantly grown its Azure cloud platform and is increasingly using artificial intelligence, including through its Copilot AI assistant and partnerships such as the tie-up with ChatGPT maker OpenAI.

"Today Microsoft's ecosystem is stronger and more closely interconnected than ever before," Mundt said.

Microsoft's financial strength and wide reach have also allowed it to quickly build up strong positions in new markets, the statement added, citing video and messaging app Teams, the Xbox gaming console and professional networking platform LinkedIn as examples.

The watchdog stressed that its latest decision "applies to Microsoft as a whole, not only to individual services or products".

In a response, Microsoft said it recognised its "responsibility to support a healthy competitive environment".

"We will strive to be proactive, collaborative and responsible in working with the Bundeskartellamt," a Microsoft spokesperson said.

Big tech companies have been facing increasing scrutiny around the globe in recent years over their dominant positions as well as their tax practices.

The European Commission has already opened an investigation into Microsoft's Teams video and messaging app.

Microsoft tried to assuage the EU's concerns by untying Teams in Europe before expanding the policy to around the world in April.

But in June, the commission indicated that the changes were not enough, saying Microsoft violated EU anti-trust rules by bundling Teams with its popular Office suite.