Microsoft Corporation is set to face heightened scrutiny from the Bundeskartellamt, Germany's competition authority, due to its substantial influence in the market.

On September 30, 2024, the Cartel Office confirmed that Microsoft holds 'overriding cross-market significance for competition,' which enables increased regulatory oversight.

This designation allows the Cartel Office to prohibit practices that may threaten competition, reflecting a broader regulatory trend targeting major tech firms.

A Microsoft spokesperson acknowledged the company's responsibility to foster a fair competitive environment and expressed a willingness to collaborate constructively with the regulatory authority.

The Cartel Office's decision extends oversight beyond the European Digital Market Act (DMA), which currently recognizes only Windows and LinkedIn as gatekeeper services.

With its new powers, the Cartel Office can now address anti-competitive practices across all Microsoft services, rather than limiting its focus to specific products.

Andreas Mundt, head of the Bundeskartellamt, highlighted Microsoft's pervasive presence in various sectors, emphasizing its significant market positions in Windows and Office applications.

Many third-party products struggle with compatibility and feature parity with Microsoft software, raising concerns about fair competition.

Microsoft's financial strength has allowed it to rapidly enter new markets, including video conferencing and gaming, further solidifying its industry dominance.

The FCO previously investigated the Microsoft-OpenAI partnership but determined it did not warrant a traditional merger review, although it has now gained broader regulatory powers.

Microsoft's dominance extends beyond Windows, encompassing server operating systems and productivity software, which complicates the competitive landscape.

The ongoing scrutiny from cartel authorities reflects persistent concerns about Microsoft's market influence and practices, particularly in light of its collaborations with OpenAI.