🏢 Japan's antitrust watchdog just made a bold move against one of the world's biggest tech companies. The Japan Fair Trade Commission raided Microsoft Japan's headquarters in Tokyo, investigating whether the company used its dominance in software to choke off competition in the booming cloud market. With the EU, US, and UK running parallel probes, this looks like a global reckoning for Big Tech's cloud practices.

What Happened: Japan's Watchdog Raids Microsoft

On February 25, 2026, Japan's Fair Trade Commission (JFTC), the country's main competition authority, conducted an on-site inspection at Microsoft Japan's headquarters in Minato-ku, Tokyo. The raid was carried out on suspicion of violating Japan's Antimonopoly Act, specifically its rules against "unfair trade practices." NHK, the Nikkei, and the Yomiuri Shimbun all reported the news.

Microsoft Japan responded the same day, saying it would "fully cooperate with the JFTC's request." The commission plans to analyze seized documents and interview relevant parties, and the investigation may extend to Microsoft's US headquarters.

The Allegation: Locking Customers Into the Cloud

The investigation centers on the licensing practices around Microsoft's cloud platform, Azure. According to reports, two issues are in focus.

The first is restrictions on Microsoft 365. The suite that includes Word, Excel, and Teams (formerly Office 365) was allegedly blocked from running on rival cloud platforms such as Amazon Web Services (AWS) or Google Cloud. The second is discriminatory pricing: when customers did run Microsoft software on a competitor's cloud, they were reportedly charged higher licensing fees than they would pay on Microsoft's own Azure, effectively nudging them toward Azure.

If confirmed, these practices could amount to "obstruction of competitors' transactions" or "conditional restraint of trade" under Japanese law. The concern is that Microsoft used its near-monopoly in operating systems (Windows) and office software (Microsoft 365) to disadvantage rivals in a separate market and funnel customers into its own cloud. Using strength in one market to win another is sometimes called "tying."

For context, cloud computing lets companies use software and store data over the internet without running their own servers. The global cloud infrastructure market is dominated by three players: AWS at roughly 30%, Azure at roughly 20%, and Google Cloud just above 10%, together controlling about 60% of the market. In Japan, AWS is used by more than half of cloud-adopting companies, while Azure holds particularly strong influence among large enterprises and government agencies thanks to its tight fit with Microsoft's other products.

A Global Squeeze on Microsoft

What makes Japan's move notable is that it isn't happening alone. Regulators across several continents are scrutinizing Microsoft's cloud licensing at almost the same time.

In the European Union, the European Commission opened investigations under its Digital Markets Act (DMA) in November 2025, examining whether Azure and AWS should be classified as "gatekeepers." That designation would force changes such as standardized tools for customers to move their data to competing platforms. DMA violations can draw fines of up to 10% of a company's annual global revenue. Google, which had filed its own complaint against Microsoft in Brussels, withdrew it once the Commission launched its own probe.

In the United States, the Federal Trade Commission (FTC) sent Microsoft a civil investigative demand running to hundreds of pages in late 2024, opening a sweeping inquiry that spans cloud licensing, software bundling, and AI. It is reportedly the most comprehensive federal investigation of Microsoft since the browser wars of the 1990s.

In the United Kingdom, the Competition and Markets Authority (CMA) concluded that "competition is not working well" in cloud services and recommended investigations into Microsoft and AWS for early 2026. A class-action lawsuit valued at roughly £1.7–2.1 billion (about $2.1–2.6 billion) over Microsoft's cloud licensing is also moving through the UK Competition Appeal Tribunal.

Why Japan Is Pushing Now

Japan's tougher stance toward GAFAM (Google, Apple, Meta, Amazon, and Microsoft) reflects years of groundwork.

In June 2024, Japan enacted a law promoting competition in smartphone software, aimed at Apple's and Google's grip on app distribution. It took full effect in December 2025. In April 2025, the JFTC set up a dedicated digital markets division and tripled its staff from 14 to about 50. That still trails the EU's roughly 100-person team and the UK's planned 200, but it marks a real commitment.

That same April, the JFTC took a first against any GAFAM company: it moved to issue a cease-and-desist order against Google for requiring smartphone makers to pre-install its apps, treating that as a conditional restraint of trade. The Microsoft raid extends this trajectory, and a full-scale antitrust inquiry into cloud market practices is unusual even by global standards.

What It Means for Japanese Businesses

The investigation reaches straight into Japanese workplaces. About 80% of Japanese companies already use cloud services, and Microsoft 365 is embedded everywhere from government offices to small firms. If the licensing practices are reformed, businesses could pick a cloud other than Azure without a cost penalty, making multi-cloud setups easier to build.

Japan's cloud market is worth about ¥4.4 trillion (roughly $28 billion) and keeps growing as generative AI spreads. Whether fair competition can be preserved in that market goes to the heart of Japan's digital competitiveness.

How Is Big Tech Regulated Where You Live?

Because services like Windows and Microsoft 365 are so woven into daily life and business, Japan has started scrutinizing whether their maker is distorting competition in the cloud. Big Tech regulation is becoming a global movement, alongside the EU's DMA, US antitrust suits, and the UK's CMA review, but each country strikes its own balance between reining in dominance and protecting innovation.

How is Big Tech regulated in your country? When you choose a cloud service, do you really have enough options? Tell us about the situation where you live.

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