Germany Sours On Microsoft Again, Launches Antitrust Review

Microsoft is the latest US tech giant under investigation by Germany's competition watchdog.

On Tuesday, Germany's Bundeskartellamt — which translates to federal cartel office — announced it was evaluating whether Microsoft qualified as a company of "paramount significance." Or put another way, whether it's large enough to pose a threat to companies with fewer resources and therefore warrant closer scrutiny by regulators.

The investigation is being conducted under abuse control laws that went into effect in early 2021. These changes granted the agency the authority to prohibit large companies from engaging in certain business practices if it's determined they're likely to harm competition.

And while regulators have only just begun their probe of Microsoft's business dealings, there are a few reasons to believe the company already meets the criteria. "The existence of a digital ecosystem which extends across various markets can be an indication that a company holds such a position," the Bundeskartellamt said in a statement.

The agency pointed to the company's expansive portfolio, which spans operating systems, productivity software, cloud services, video games, and social media as examples. "In light of this, there are good reasons to examine whether Microsoft is of paramount significance for competition across markets. Such a finding would allow us to take action at an early stage and prohibit possible anticompetitive practices," Bundeskartellamt President Andreas Mundt said in a statement.

There's also the fact that Microsoft isn't the first company to attract the German watchdog's attention. Last year, the agency found with "binding effect" that both Google and Meta were companies of paramount significance and were thus subject to heightened scrutiny. Amazon has found itself in a similar boat, but has appealed its decision. Meanwhile, the Bundeskartellamt says it's nearing completion of an investigation into Apple.

• Google again accused of willfully destroying evidence in Android antitrust battle
• EU 'poised' to OK Microsoft's Activision biz gobble
• Uncle Sam to block Adobe absorption of Figma over monopoly fears
• Qualcomm tries to kick holes in logic behind €242M fine

In response to the German government's investigation, a Microsoft spokesperson told The Register: "As a major technology company, we are mindful of our heightened responsibility to support a healthy competitive environment. We will engage constructively with the Bundeskartellamt, as they seek to understand our role in digital markets."

However, it's worth noting that at this stage, the agency isn't looking at specific allegations of anticompetitive practices against Microsoft. Those, Germany notes, will be addressed in a separate decision made in collaboration with the European Union.

Microsoft is, of course, no stranger to antitrust investigations and litigation. Back in the '90s, the US government sued Microsoft for its attempt to achieve an effective monopoly over the PC market. Microsoft more recently has found itself at the center of an antitrust probe in the European Union over its $69 billion acquisition of video game maker Activision Blizzard.

Microsoft has a torrid history with German government officials, with an early noughties deal displacing its operating system on many servers in the country's ministry of the interior, while the city of Munich migrated 16,000 desktop PCs to the Linux operating system in 2004. In 2017, however, Munich went all-in on Windows again, closely followed by Lower Saxony. ®