UK Competition and Markets Authority launches Microsoft antitrust inquiry over software dominance

UK begins antitrust inquiry into Microsoft's business software ecosystem

Brit regulator has 'heard' customers can't always 'effectively combine software from Microsoft with that of other providers' The UK's Competition and Markets Authority (CMA) is taking a closer look at Microsoft's business software empire, launching a strategic market status investigation into the company's ecosystem. The probe, which is the fourth since the UK's digital markets competition regime came into force last year, will determine whether Microsoft should be designated as having strategic market status, which would allow the CMA to implement interventions to support competition. In March, the CMA announced that the investigation was coming. The regulator was concerned that Microsoft's software licensing practices were reducing competition in the cloud. In today's announcement, the CMA said it had "heard that UK customers may not always be able to effectively combine software from Microsoft with that of other providers, limiting their ability to get access to the best products at the most competitive prices." Microsoft is no stranger to regulatory friction. In 2025, it described calls from AWS and Google for the UK competition regulator to "intervene and constrain the price" it charges customers to run wares on those rivals' cloud plaforms as "extraordinary and unprecedented." Two year prior, Google branded Microsoft's cloud software licensing a "tax" paid by customers as a penalty for not running Microsoft software on Azure infrastructure. It claims that Microsoft charges up to four times more, for example, to run Windows Server on GCP. AWS has previously moaned about this too. As well as assessing whether Microsoft is using its position to limit customer choice, the CMA investigation "includes looking at how AI competitors are able to integrate with Microsoft's business software, giving customers access to AI software across suppliers to best suit their needs." Microsoft is pushing Copilot AI into as many Microsoft 365 subscriptions as it can, even creating a new tier, E7, aimed specifically at AI services. In a statement, Nicky Stewart, senior advisor to the Open Cloud Coalition - a trade association Microsoft previously dismissed as a Google lobby group - said: "This investigation needs to be both rapid and conclusive. It must address Microsoft's unfair licensing practices once and for all, giving the UK cloud market a level playing field and the confidence to innovate and invest for the long term." Reg readers should not expect results anytime soon. It took 21 months for the CMA to publish the results of an investigation into the UK cloud services market, in which it said Microsoft and AWS were using their dominance to harm UK cloud customers. It claimed Microsoft, for example, could have charged UK enterprise customers £500 million more annually to run its wares in AWS and Google clouds than they'd have paid to run them in Azure. A key concern from that investigation - whether Microsoft's software licensing practices were reducing competition in cloud services - has informed this one. This latest inquiry must be completed within nine months, and a decision on designating Microsoft with SMS is scheduled to be reached by February 2027. For its part, a Microsoft spokesperson told The Register, "We are committed to working quickly and constructively with the CMA to facilitate its review of the business software market." The investigation will be wide-ranging, encompassing productivity applications, operating systems, databases, and security software. Sarah Cardell, Chief Executive of the CMA, said, "Our aim is to understand how these markets are developing, Microsoft's position within them and to consider what, if any, targeted action may be needed to ensure UK organizations can benefit from choice, innovation and competitive prices."

UK opens antitrust probe into Microsoft's business software

LONDON, May 14 (Reuters) - Britain launched an antitrust investigation into Microsoft's (MSFT.O), opens new tab dominance in business software that could lead to targeted action if the U.S. company is found to have "strategic market status" in the sector. The Competition and Markets Authority said the investigation - its fourth under new powers granted last year - would examine whether the bundling of Windows, Word, ⁠Excel, Teams, Copilot and other products was weakening competition. It would also look at how AI competitors were able to integrate with Microsoft's business software, it said. An SMS designation would also allow the CMA to intervene in the cloud market, where it has previously found Microsoft's use of software licensing could be reducing competition in cloud services. CMA Chief Executive Sarah Cardell said business ⁠software was a cornerstone of the British economy, with hundreds of thousands of customers relying on Microsoft's systems. "Our aim is to understand how these markets are developing, Microsoft's position within them and to ⁠consider what, if any, targeted action may be needed to ensure UK organisations can benefit from choice, innovation and competitive prices," she said ⁠in a statement on Thursday. A Microsoft spokesperson said: "We are committed to working quickly and constructively with the CMA to facilitate ⁠its review of the business software market." The investigation will conclude by February 2027, the CMA said. Reporting by Muvija M and Paul Sandle; editing by William James and Sarah Young Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Boards, Policy & Regulation

The CMA opens its fourth Strategic Market Status case into Microsoft

Windows, Office, Teams, Copilot, server operating systems, and the cloud licensing the regulator already flagged last July. A nine-month investigation, a February 2027 designation decision, and the first CMA SMS case to walk straight through the door the cloud market inquiry left ajar. The UK's Competition and Markets Authority has opened a Strategic Market Status investigation into Microsoft's business software ecosystem, the fourth such case under the digital markets regime that came into force in January 2025. The previous three (Google search, Apple mobile, Google mobile) were designated in October. Microsoft is now the next name on the list, and the scope is wider than anything the CMA has previously taken on. The case covers Windows, Office (Word, Excel, and the rest), Teams, the rapidly expanding Copilot footprint, server operating systems, database management systems, and security software. Microsoft has, on the CMA's own count, more than 15 million commercial users across that ecosystem in the UK, sold to hundreds of thousands of businesses and public-sector buyers. The regulator's central question is whether Microsoft uses that position to limit customer choice, and the mechanisms it has named are the familiar three: bundling, interoperability gaps, and default settings. The interesting move sits in the fine print. The CMA's cloud services market investigation closed in July 2025 with a final decision that found Microsoft was charging AWS and Google Cloud materially higher wholesale prices for its own software than it charged Azure customers for the same products. The inquiry group recommended SMS investigations into both Microsoft and AWS in the cloud. The CMA Board, in the months that followed, declined to prioritise either, citing voluntary changes the two companies had made to egress fees and interoperability terms. Today's case quietly puts the Microsoft licensing question back inside CMA jurisdiction, this time through the business-software door rather than the cloud one. Sarah Cardell, the CMA's chief executive, framed the launch in the language the regime requires: "Business software is a cornerstone of how the UK economy functions, from small businesses to major public services and infrastructure." The targeted-action wording follows. SMS designation does not, on the CMA's own emphasis, assume wrongdoing. What it does is unlock the toolkit: conduct requirements, pro-competition interventions, and the bespoke remedies that the regime was written to allow without the multi-year market-investigation timetable that produced the cloud finding in the first place. The AI layer is explicit in the scope document. The CMA wants to know whether competing AI providers can integrate with Microsoft's business software, and whether Copilot's defaults inside Office and Teams are being set in a way that forecloses challenger AI tools. This is the question Brussels has been circling for eighteen months, and which the EU AI Act handles more procedurally. The CMA, characteristically, has chosen the SMS instrument first and the public consultation second. The procedural calendar is short by competition-law standards. Invitation-to-Comment responses are due by 4 June. The investigation must be completed within nine months, with a designation decision by February 2027. A public consultation will sit ahead of the final call. The CMA has flagged in advance that it wants to hear from challenger AI companies, business-software customers, security-software rivals, and any organisation that has tried and failed to combine Microsoft's productivity stack with a competitor's tools. Microsoft's response will become public over the next month, and its recent stance signals the line. In its rebuttal to the cloud market investigation, Microsoft argued that competition was working and its licensing changes had already addressed the regulator's concerns. The same arguments will run again, with the difference that the CMA is now starting from a different statute and a wider remit, and that the £1bn UK class action over the same licensing question gives it an evidentiary parallel it did not have in 2024. The decision, when it comes, will land at the moment Copilot adoption inside UK businesses is moving from pilot to procurement.

UK watchdog probes Microsoft over interoperability issues

The CMA said that users may not be able to combine Microsoft software with competitors' products effectively. UK's competition watchdog has launched an investigation into Microsoft's enterprise software ecosystem over interoperability concerns. The Competition and Markets Authority's (CMA) probe will consider whether Microsoft should be given the 'strategic market status' (SMS) - a designation given to companies that dominate the UK market in a particular digital activity. Apple and Google received this status last year over their leadership in mobile platforms. The investigation will also assess whether Microsoft's product bundling limits interoperability for users, and whether default settings prevent customers from switching to competing services. This will include probing how Microsoft's AI competitors are able to integrate with its business software. Hundreds of thousands of UK users use Microsoft's enterprise software daily, which spans across the Windows operating system, Microsoft 365 suite, as well as Copilot AI. The CMA finds that Microsoft has more than 15m commercial UK-based users across its ecosystem, making it a key provider of productivity tools in the country. The competition watchdog said it has received information that users may not be able to combine Microsoft software with competitors' products effectively. In its probe, it will examine Microsoft's wide range of products, including productivity software, personal computer and server operating systems, database management systems and security software. The investigation will take nine months to conclude. The authority has invited organisations based in the UK and around the world, including rival tech companies and business software customers to share their experiences. This is the fourth SMS investigation opened by the CMA since the UK's digital markets competition regime came into force in January 2025. The law gives the CMA additional powers to propose remedies and improve market competition in the country. Early last year, it opened a probe into Apple and Google over their mobile ecosystems, The designation would also allow the CMA to potentially intervene on concerns from a separate investigation into Microsoft's software licensing in the cloud market. "Business software is a cornerstone of how the UK economy functions, from small businesses to major public services and infrastructure. Hundreds of thousands of customers in the UK rely on Microsoft's systems, which is why it's so important to ensure these services are delivering good outcomes," said Sarah Cardell, CMA's CEO. "Our aim is to understand how these markets are developing, Microsoft's position within them and to consider what, if any, targeted action may be needed to ensure UK organisations can benefit from choice, innovation and competitive prices." Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.