Microsoft has been the focus of much controversy in the computer industry, especially since the 1980s, most critically for its business tactics, which some perceive as unfair and anticompetitive. Often, these practices are described with the term "embrace, extend and extinguish", in which Microsoft initially embraces and extends a competing standard or product, only to later extinguish it through such actions as writing their own incompatible version of the software or standard. These and other tactics have led to Microsoft being convicted by U.S. courts of being an abusive monopoly on at least one occasion, as well as lawsuits by various companies and governments, with varying degrees of success. Microsoft has also been called a "velvet sweatshop" in reference to allegations of the company working its employees to the point where it might be bad for their health. The first instance of the term in reference to Microsoft originated from a Seattle Times article in 1989, and later became used to describe the company by some of Microsoft's own employees.

Some also accuse Microsoft of allowing the user interface of its products to become inconsistent and overly complicated, requiring interactive "wizards" to function as an extra layer between the user and the interface. The security of Microsoft products (such as Internet Explorer) is also questioned by some as being overly vulnerable to computer viruses and malicious attacks. In addition, proponents of open source are engaged with Microsoft in a debate over the Total cost of ownership (TCO) of its products, as some perceive Microsoft software as more expensive to purchase, use and maintain than competitors' software. Free software proponents and other critics also point to the company's "Trustworthy Computing" initiative calling it "Treacherous Computing", a security proposal which some speculate will allow software developers to enforce any sort of client-side restriction they wish over their software, as well as Microsoft's use of Digital Rights Management, technology designed to provide content and software providers the ability to put restrictions on how their products are used on their customer's machines.