Microsoft (MSFT, Financials) is under investigation by the Federal Trade Commission for alleged anti-competitive practices, but Wedbush Securities views the inquiry as having limited impact with a potential change in leadership at the agency.
Following the approaching change to a Trump presidency, FTC Chairwoman Lina Khan is set to resign.
According to Wedbush researcher Dan Ives in a client report, Khan's stated Wednesday probe is considered as a last action before her expected departure. "In our view as the dark days for tech with Lina Khan [sic] at the FTC appear numbered now with a Trump White House," Ives said. Once a new FTC chair is installed, perhaps by January, the investigation is anticipated to fade into the background.
In its probe into Microsoft, the FTC is looking at a number of concerns, including claims of anti-competitive licensing policies that would have deterred consumers from moving data from Azure, its cloud platform, to competitor services. Other topics of investigation include earlier this year cybersecurity vulnerabilities and the company's participation with artificial intelligence, especially with respect to OpenAI.
With a price objective of $550, Ives maintained an Outperform rating on Microsoft. He said that the possible change in FTC leadership would indicate a turn toward less regulatory pressure on Big Tech. "There will still be questions and scrutiny of Microsoft and Big Tech but right now the Khan era ending is the best news for Big Tech which has been in the constant unrelenting focus of Khan and the FTC over the past few years," Ives said.
The result of the research is yet unknown, but given Microsoft's recent high-profile purchase of Activision Blizzard and continuous cloud and artificial intelligence industry rivalry, the company comes first.
