The way in which the FTC is pursuing Microsoft. Does it seem significant to you? I think it's very important. You know, the Microsoft case brought by the Department of Justice in the late 1990s was critical to the expansion and growth of the Internet.

Many of the things that we benefit from in competition on the Internet are specifically because of that earlier case. What's interesting is, of course, we've heard back from the Microsoft deputy general counsel, Rima Al-Aly, who put on LinkedIn, saying on behalf of Microsoft,

the FTC inspector general, to investigate whether the FTC management improperly leaked confidential information about a potential antitrust investigation. How do you see these sorts of investigations evolving and becoming publicly known before? Indeed, Microsoft has a chance to ultimately lead the way here?

I'm extraordinarily skeptical about whether or not the agency would think there would be some kind of leak from the agency. That's extraordinarily unusual. Third parties, however, who receive civil investigative demands can disclose whatever they want. Maybe this is a situation where one of those parties disclosed information

to the press about the request they had received from the FTC. Of course, this is wide-ranging, it would seem. Bloomberg initially reported on how it's going to be focusing on the way they intertwine their operating system and also their dominance in cybersecurity.

Now, the information is talking about the opening of the Microsoft deal. I want to just take a listen to a conversation I had with the CEO yesterday, Matt Gorman, talking about how he'd like to offer his own clients access to open AI models, but

Can't at the moment. Just take a listen. I believe that we would love opening our models inside. Available. Yes, we would. Absolutely. It's, you know, we're... we listen to our customers and if that's something that customers want, we're absolutely game.

Obviously, with the partnership, it takes multiple sources and there's probably some complexities in there as you alluded to. But I think in the fullness of time that likely is the case. So therein lies some of the issue that maybe the FTC is investigating.

The relationship with OpenAI and Microsoft and whether it should be, indeed, broken open a little. It seems as though Matt Gorman is positive that it will. Do you think that ultimately that will be done by self-regulation or actual FTC regulation? No, I think the FTC is going to take a serious look at this relationship and

the potential of that relationship to foreclose other forms of competition, other rivals. They're going to take a very close look at the nature of the agreement between OpenAI and Microsoft. Do you think, though, that a lot of these car companies are having

particular relationships with some of these very powerful generative AI models? Is that something that's generally going to be looked at across the board? Yes. But it's always important to realize that Microsoft is dominant there, dominant in cloud computing. They're dominant in certain software

categories, vital software categories. And when a firm takes that dominance and extends that dominance to other product markets and forecloses competition in those markets, that violates the antitrust laws. I feel the FTC would have something to say about that, as you're implying.

dominant. They feel that they have owned a lot of the market. I'm sure that even in other areas, Oracle feels that they've got a key stake, Google as well. Can you have broader provision, less of an oligopoly-like cloud operation when

this ultimately is incredibly expensive to offer? I think that's one of the considerations that's kept in mind here. But we see many markets where there are no contractual arrangements that foreclose competition, where competition flourishes. And it's specifically those arrangements like the arrangement between Microsoft

and OpenAI that will receive intense scrutiny, especially because Microsoft is so dominant in cloud computing and dominant in cybersecurity. And in many ways, the reporting is such that this investigation started because of some of the failings related to cyber when it came to federal provision.

Is that what sparked all of this, David? How do you think this is going to weather a transition into a new administration? First of all, that suggests one of the real advantages of having a Federal Trade Commission that deals with both consumer protection issues and the failure

to provide cybersecurity adequately and competition issues. I think this is an investigation that won't lose any steam in a new Trump administration. The kinds of legal issues here about when bundling is legal and illegal, I think there's a pretty strong consensus

between Republicans and Democrats and antitrust enforcers. So I expect this investigation will go full throttle in the next administration.

Microsoft Is in the FTC Crosshairs

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Microsoft Is in the FTC Crosshairs

Microsoft Is in the FTC Crosshairs

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