Considered in this study are the axially-symmetric problems of fracture of composite materials with interacting cracks, which are subjected to initial (residual) stresses acting along the cracks planes. An analytical approach within the framework of three-dimensional linearized mechanics of solids is used. Two geometric schemes of cracks location are studied: a circular crack is located parallel to the surface of a semi-infinite composite with initial stresses, and two parallel co-axial penny-shaped cracks are contained in an infinite composite material with initial stresses. The cracks are assumed to be under a normal or a radial shear load. Analysis involves reducing the problems to systems of second-kind Fredholm integral equations, where the solutions are identified with harmonic potential functions. Representations of the stress intensity factors near the cracks edges are obtained. These stress intensity factors are influenced by the initial stresses. The presence of the free boundary and the interaction between cracks has a significant effect on the stress intensity factors as well. The parameters of fracture for two types of composites (a laminar composite made of aluminum/boron/silicate glass with epoxy-maleic resin and a carbon/plastic composite with stochastic reinforcement by short ellipsoidal carbon fibers) are analyzed numerically. The dependence of the stress intensity factors on the initial stresses, physical-mechanical parameters of the composites, and the geometric parameters of the problem are investigated.