Microsoft is Investigated for "Facilitating" a Security Flaw to Sell Software

[mansja]

Microsoft is Investigated for "Facilitating" a Security Flaw to Sell Software

Everyone knows that laws take a long time to define the limits of technology usage, due to the ever-increasing speed of innovation. Many things remain in a gray area, with little consensus or global standards. One of the most controversial topics since the late 1990s has been the omnipresence of software and digital solutions from tech giants like Microsoft. This issue has resurfaced in a recent mission by the current chair of the Federal Trade Commission (FTC).

Lina Khan, just 34 years old, is a specialist in market power analysis and was appointed by Joe Biden in 2021 for her rigorous stance on monopolies and the unfair competitive advantages held by Big Tech. The United States has often been criticized for being lenient with giants like Apple, Google, and Microsoft, which have racked up billions in fines in the European Union for similar issues.

Thus, as the Biden administration nears its end, Microsoft finds itself in a situation reminiscent of 1998, when the FTC began a deeper investigation into whether the Redmond giant manipulated the market to gain competitive advantages for its products.

The FTC is particularly concerned with Microsoft’s bundling of its ubiquitous Office suite with cybersecurity and cloud computing services. This includes a deal to update public sector packages for a limited time, which resulted in a government cybersecurity crisis, allegedly aimed at selling more licenses.

According to investigative journalism by ProPublica, as well as Bloomberg and Financial Times reports in November, the FTC is investigating claims from Microsoft’s competitors that bundling its popular software with cloud services made competition significantly harder.

ProPublica reports that FTC attorneys have recently interviewed and scheduled meetings with Microsoft’s competitors. These efforts have compelled Microsoft to provide information related to the case as part of a civil investigation.

A Microsoft spokesperson vaguely told the publication that the FTC’s request is "broad, comprehensive, and asks for things that are beyond the realm of logical possibility."

Profiting from Cyberattacks
ProPublica’s November investigation revealed that Microsoft allegedly leveraged a series of cyberattacks to sell more licenses to the U.S. government. Following a meeting with President Biden in the summer of 2021, the company reportedly offered to upgrade the government’s existing packages, including Windows and Office, to a more expensive version featuring its advanced cybersecurity products. Microsoft also sent consultants to install the updates and train staff on their use.

Many U.S. government divisions, including all military services within the Department of Defense, accepted the offer and began paying for the costlier packages after the trial period ended. However, this sales tactic ironically resulted in security flaws in Microsoft’s own products.

The company reportedly knew the application contained a vulnerability but chose not to fix the flaw, as doing so would create friction in government logins while Microsoft was competing for contracts domestically. Instead, Microsoft allegedly remained silent to avoid jeopardizing its business deals.

This is yet another chapter in the ongoing saga of Big Tech embedding competitive advantages in their products. As noted earlier, laws often leave loopholes, and not every situation has a Lina Khan to intervene rigorously. We await the next developments.

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