quality:correction, information:highlighting
Controversies

Criticism of Microsoft has followed various aspects of its products and business practices. Frequently criticized are the ease of use, robustness, and security of the company's software. They have also been criticized for the use of permatemp employees (employees employed for years as "temporary," and therefore without medical benefits), the use of forced retention tactics, which means that employees would be sued if they tried to leave. Historically, Microsoft has also been accused of overworking employees, in many cases, leading to burnout within just a few years of joining the company. The company is often referred to as a "Velvet Sweatshop", a term which originated in a 1989 Seattle Times article, and later became used to describe the company by some of Microsoft's own employees. This characterization is derived from the perception that Microsoft provides nearly everything for its employees in a convenient place, but in turn overworks them to a point where it would be bad for their (possibly long-term) health.

As reported by several news outlets, an Irish subsidiary of Microsoft based in the Republic of Ireland declared £220 bn in profits but paid no corporation tax for the year 2020. This is due to the company being tax resident in Bermuda as mentioned in the accounts for 'Microsoft Round Island One, a subsidiary that collects license fees from the use of Microsoft software worldwide. Dame Margaret Hodge, a Labour MP in the UK said, "It is unsurprising – yet still shocking – that massively wealthy global corporations openly, unashamedly and blatantly refuse to pay tax on the profits they make in the countries where they undertake business".

In 2020, ProPublica reported that the company had diverted more than $39 billion in U.S. profits to Puerto Rico using a mechanism structured to make it seem as if the company was unprofitable on paper. As a result, the company paid a tax rate on those profits of "nearly 0%." When the Internal Revenue Service audited these transactions, ProPublica reported that Microsoft aggressively fought back, including successfully lobbying Congress to change the law to make it harder for the agency to conduct audits of large corporations. In 2023, Microsoft reported in a securities filing that the U.S. Internal Revenue Service was alleging that the company owed the U.S. $28.9 billion in past taxes, plus penalties related to mis-allocation of corporate profits over a decade.

"Embrace, extend, and extinguish" (EEE), also known as "embrace, extend, and exterminate," is a phrase that the U.S. Department of Justice found that was used internally by Microsoft to describe its strategy for entering product categories involving widely used standards, extending those standards with proprietary capabilities, and then using those differences to strongly disadvantage competitors. Microsoft is frequently accused of using anticompetitive tactics and abusing its monopolistic power. People who use their products and services often end up becoming dependent on them, a process is known as vendor lock-in.

Microsoft was the first company to participate in the PRISM surveillance program, according to leaked NSA documents obtained by The Guardian and The Washington Post in June 2013, and acknowledged by government officials following the leak. The program authorizes the government to secretly access data of non-US citizens hosted by American companies without a warrant. Microsoft has denied participation in such a program.

Jesse Jackson believes Microsoft should hire more minorities and women. In 2015, he praised Microsoft for appointing two women to its board of directors.

In 2020, Salesforce, the manufacturer of the Slack platform, complained to European regulators about Microsoft due to the integration of the Teams service into Office 365. Negotiations with the European Commission continued until the summer of 2023, but, as it became known to the media, they reached an impasse. Microsoft is now facing an antitrust investigation.

In June 2024, Microsoft Corp. faced a potential EU fine after regulators accused it of abusing market power by bundling its Teams video-conferencing app with its Office 365 and Microsoft 365 software. The European Commission issued a statement of objections, alleging Microsoft's practice since 2019 gave Teams an unfair market advantage and limited interoperability with competing software. Despite Microsoft's efforts to avoid deeper scrutiny, including unbundling Teams, regulators remained unconvinced. This action followed a 2019 complaint from Slack, which was later acquired by Salesforce. Microsoft's Teams usage soared during the pandemic, growing from 2 million daily users in 2017 to 300 million in 2023. The company has a history of antitrust battles in the US and Europe, with over €2 billion in EU fines previously imposed for similar abuses.