Microsoft faces UK competition probe over business software dominance and AI integration

Microsoft Business Software Ecosystem Faces UK Competition Probe

Microsoft Corp.'s business software ecosystem faces a UK antitrust probe starting in May to decide whether licensing practices for products such as Word, Excel and Copilot need tighter regulation. The Competition and Markets Authority said Tuesday it will open the investigation to decide whether the company must be given so-called strategic market status, allowing the regulator to impose penalties and steps to improve competition. The decision follows "wider concerns" about Microsoft's position in business softwares that include productivity software, operating systems and database management, the CMA said. "The embedding of advanced AI, including assistants and emerging 'agentic' technologies, into familiar workplace tools means this is a pivotal moment for the sector," the CMA said. At the same time, the CMA said it would continue working with Microsoft and Amazon Web Services Inc. for steps to improve competition in the cloud services market. The pair have assured "material steps"to improve competition in the cloud services market and the CMA will keep them under review, the watchdog said. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Plus Signed UpPlus Sign UpPlus Sign Up By continuing, I agree to the Privacy Policy and Terms of Service. The announcement follow the CMA's prior investigation into the cloud services market which flagged competition concerns. The CMA found Microsoft and AWS each cornered as much as 40% of the UK's customer spend on cloud services, which also underpin artificial model development and deployment. Customers spent £10.5 billion ($13.9 billion) on cloud services in 2024, with spending growing by nearly 30% each year since 2020, according to the watchdog. Microsoft's cloud changes focus on switching and interoperability, according to Brad Smith, the company's vice-chairman. "The cloud market itself remains intensely competitive, with large investments by Amazon, Google, Oracle, and new neo-cloud entrants and ironically with Google, a complainant in this review, growing faster in the last quarter of 2025 than Amazon or Microsoft," Smith said in a statement. Amazon has committed to changes in cloud business that impact customer choice around switching and portability, it said in a statement. "We'll work closely with the CMA to identify where UK customers can benefit," Amazon said.

Microsoft faces UK watchdog probe over business software

The UK's competition regulator plans to launch an investigation into Microsoft's business software unit, as it looks to ensure the Windows maker does not stymie the growth of new rivals emerging from the AI boom. The Competition and Markets Authority on Tuesday said it would assess whether the US tech giant should be designated with "strategic market status", placing it under the same regulatory regime that the agency has already used to rein in Google's search engine and Apple and Google's mobile app stores. Microsoft's competitors Amazon Web Services and Google Cloud have long complained that the company charges more to run its software, such as Windows, for customers using their cloud platforms than on its own Azure service. The regulator is also concerned that the dominance of Windows and Microsoft's Office suite, including Teams and its Copilot AI assistant, could make it harder for newer entrants to the business software market to compete, at a time when AI tools such as Anthropic's Claude Code and Google's Gemini are growing quickly. However, despite a report last summer by an independent panel of the CMA that the UK cloud market was "not working well", the agency's board stopped short of imposing new conduct requirements on Microsoft's Azure or AWS, as had been widely expected. The CMA said Microsoft and AWS had committed to making it easier and cheaper for customers to switch between cloud providers, as well as enabling data to move more freely between their own services and smaller rivals such as Google. The regulator said it would monitor progress on cloud interoperability and review the market again in six months to see if further intervention was necessary. "We're using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers," said Sarah Cardell, CMA chief executive. "This announcement shows we're not just responding to today's concerns but getting ahead of emerging issues too." Brad Smith, Microsoft's president, said that AI was changing the market "at an unprecedented pace". "We are committed to working quickly and constructively to address these issues, including by providing all the information the CMA needs to move forward with its reviews," he said. The former head of Amazon UK, Doug Gurr, who was confirmed as the CMA's permanent chair last month, recused himself from any involvement in the agency's decision in light of his previous role. After Gurr's pre-appointment hearing in February, the parliamentary committee urged the former Amazon executive to remove himself from discussions of the impending SMS designation.

UK watchdog to probe Microsoft software dominance, AI integration By Investing.com

Investing.com -- Britain's competition watchdog said it will investigate whether Microsoft dominates business software markets, a move that could force the U.S. tech giant to change licensing practices affecting hundreds of thousands of UK businesses and public sector organisations. The Competition and Markets Authority, whose board met on March 25 to determine its next programme of work, said it would launch a Strategic Market Status investigation into Microsoft's business software ecosystem commencing in May under the UK's Digital Markets Competition Regime. The probe covers products including Windows, Word, Excel, Teams and Copilot. An SMS designation, which can take up to nine months, would allow the CMA to impose conduct requirements or pro-competition interventions on Microsoft, subject to separate legal processes. "We're not just responding to today's concerns but getting ahead of emerging issues too," CMA Chief Executive Sarah Cardell said. The watchdog said the rapid embedding of artificial intelligence, including agentic technologies, into workplace tools, with products such as Microsoft Copilot, Enterprise GPT and Claude Enterprise already becoming commonplace, made this a pivotal moment, with implications for UK productivity and competitiveness. A key driver of the SMS decision was the CMA's finding that Microsoft had made no material progress on licensing concerns since its cloud market investigation concluded in July 2025. That investigation found Amazon Web Services and Microsoft each hold up to 40% of UK customer spend on cloud services, with both firms identified as holding significant market power. Separately, the CMA said Microsoft and Amazon had taken steps to lower cloud egress fees and improve interoperability. Both firms committed to removing egress fees from UK customer contracts for a switching period of at least 180 days and will introduce new products directly connecting their datacentres to each other and to Google Cloud Platform. Microsoft said it would implement contractual changes within two months. The CMA said the effectiveness of these measures remained to be seen and that further steps were required. The probe places Britain alongside other jurisdictions scrutinising Microsoft. Brazil's CADE has opened a parallel investigation into Microsoft's corporate software and cloud conduct, while Japan's JFTC is examining whether Microsoft Azure restricts customers and rivals from combining services across providers. CMA Chair Doug Gurr recused himself from the board decision. The scope of the SMS investigation and an invitation to comment will be published at commencement in May.