Microsoft Faces Closer Antitrust Scrutiny in Germany

By Mauro Orru

German antitrust officials said they were placing Microsoft under closer surveillance to prevent the tech giant from engaging in any anticompetitive practices, the latest salvo from European regulators against U.S. big tech.

The country's Federal Cartel Office said Microsoft would be subject to so-called special abuse control for five years after officials said the company was of paramount significance for cross-border competition. The measure allows German regulators to act early and prohibit companies from engaging in what they deem anticompetitive behavior.

"Today Microsoft's ecosystem is stronger and more closely interconnected than ever before, because overarching all of its activities is the increasing use of the cloud and AI, key technologies in which Microsoft has consolidated its strong position by developing its own products and entering into cooperations," Andreas Mundt, president of the Federal Cartel Office, said in a statement.

The watchdog cited the prominence of Microsoft's products across governments, businesses and households to justify its decision, singling out the Windows operating system, Office applications and Microsoft's investment in ChatGPT maker OpenAI. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

A Microsoft spokesperson said the group would strive to be proactive, collaborative and responsible in working with antitrust officials as it acknowledged its responsibility to support a health competitive environment.

Microsoft is the latest U.S. tech giant to fall under closer surveillance in Germany after officials there also stepped up monitoring of Alphabet's Google, Facebook and Instagram owner Meta Platforms, Amazon.com and Apple. An appeal is pending at the Federal Court of Justice in the Apple case, but the watchdog said its decisions on Google, Meta and Amazon were final.

Big tech has been facing heightened scrutiny across the European Union after the bloc passed sweeping digital-competition legislation such as the Digital Markets Act, which created a set of rules that sought to make it easier for officials to tackle antitrust concerns more quickly when some of the world's largest tech companies are involved.

Under the DMA, companies that the bloc considers as gatekeepers must comply with rules aimed at boosting competition in digital advertising, online search and app ecosystems. Those found to be in breach of the law face fines of up to 10% of their global revenue, and which can rise to 20% in case of repeated infringement.

Mundt said the decision from the German Federal Cartel Office would enable Germany to stop any anticompetitive practices that aren't covered by the DMA. "Our decision applies to Microsoft as a whole, not only to individual services or products," Mundt said.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

September 30, 2024 10:14 ET (14:14 GMT)

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