Tokyo – Japan’s Fair Trade Commission (JFTC) has launched an investigation into Microsoft’s business practices concerning cloud computing services, specifically focusing on potential antitrust violations related to licensing fees. The probe centers on allegations that Microsoft is unfairly restricting access to its software for companies utilizing rival cloud platforms, favoring its own Azure service.
The investigation, which included an on-site inspection of Microsoft Japan’s offices on Wednesday, February 25, 2026, according to a source close to the matter, signals a growing scrutiny of Big Tech companies by Japanese regulators. This action mirrors similar investigations in other regions, including the UK, Europe, and the USA, where Microsoft’s cloud licensing practices have drawn criticism.
Concerns Over Software Accessibility
The core of the JFTC’s investigation revolves around Microsoft’s licensing arrangements for software like Microsoft 365 – encompassing applications such as Teams and Word – and whether the company is making these services less accessible or more expensive when deployed on cloud infrastructure other than Azure. Reports suggest Microsoft offers significant discounts for its software when used on Azure, effectively increasing costs for businesses choosing competing cloud providers. This practice potentially limits competition in the cloud computing market.
According to The Register, Microsoft has stated it is “fully cooperating” with the JFTC’s requests. A spokesperson for the company confirmed their cooperation, but did not provide further details regarding the specifics of the investigation.
Broader Trend of Big Tech Regulation in Japan
This investigation into Microsoft is part of a broader trend in Japan of increased regulatory oversight of large technology companies. In August 2025, the JFTC issued a cease-and-desist order to Google, addressing concerns over the automatic installation of its online app store on Android smartphones in Japan. The commission found Google was imposing binding conditions on manufacturers, limiting consumer choice. Similarly, in 2024, Amazon Japan faced an inspection over allegations of abusing its market dominance to pressure sellers into lowering prices, impacting competition in the e-commerce sector, as reported by Firstpost.
Japan’s Fair Trade Commission has demonstrated a willingness to tackle anti-competitive practices by global tech giants, recently requiring Apple and Google to open their app stores to third-party developers, aligning with similar actions taken in other nations. This proactive approach underscores the JFTC’s commitment to fostering a fair and competitive digital marketplace.
Impact and What to Watch For
The outcome of this investigation could have significant implications for Microsoft’s cloud business in Japan and potentially influence its licensing strategies globally. If the JFTC finds Microsoft in violation of antitrust laws, the company could face substantial fines and be required to modify its licensing practices to ensure fair competition. The investigation also sets a precedent for how Japanese regulators will address similar concerns with other major technology companies operating within the country.
The JFTC’s investigation is ongoing, and further details are expected to emerge as the commission gathers and analyzes evidence. Industry analysts will be closely watching the developments to assess the potential impact on the cloud computing landscape and the broader regulatory environment for technology companies in Japan. The case highlights the increasing global scrutiny of Big Tech’s business practices and the growing demand for fair competition in the digital economy.
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