Amazon, a rival for the $10 billion contract, has complained that President Trump interfered in the process.
President Trump, who has been pushing for a sale of the Chinese-owned video app, did not say whether Oracle would be a better buyer than Microsoft.
The complaint, filed in Europe, threatens Microsoft’s recent ability to avoid regulatory scrutiny.
Peggy Johnson, who led Microsoft’s business development, will take over the struggling virtual reality start-up in August.
Facebook, Google and other behemoths are training their sights on Silicon Valley’s company of the moment.