UK Competition Watchdog Moves to Tighten Oversight of Microsoft’s Business Software

LONDON: Britain’s Competition and Markets Authority (CMA) has proposed designating Microsoft as having “strategic market status” in business software, a step that could open the way for regulatory intervention in how the US technology giant bundles products such as Excel, Teams and its Copilot artificial intelligence assistant.

The proposal follows an investigation launched in May into whether the way Microsoft packages its business software, used by around 20 million people a month in the UK, was harming competition. The regulator found that the company holds a strong position across key areas of digital activity, including PC operating systems and productivity software suites, and that this strength is reinforced by the obstacles customers face when trying to switch to rival providers.

The designation would cover Microsoft’s wider business software ecosystem, including tools such as Word, Outlook and PowerPoint as well as its security, server and operating system products. It would allow the CMA to impose conduct requirements or other measures aimed at securing choice, innovation and competitive pricing for UK businesses and public sector organisations.

The CMA said it would also examine whether customers can freely choose AI tools and whether rival AI providers can compete fairly with Copilot, whether Microsoft’s bundling of security products restricts choice, and how its licensing practices affect customers’ options for deploying software in the cloud. In a separate update on Friday, the regulator said Amazon Web Services and Microsoft still needed to address remaining barriers to switching between cloud providers and using multiple cloud services.

A Microsoft spokesperson said the company did not share the CMA’s view, maintaining that its products are open and interoperable.

The CMA will now consult on the proposal before reaching a final decision by February. If confirmed, Microsoft would become the third company subject to Britain’s new digital markets regime, after Google was designated in online search and mobile platforms and Apple in mobile platforms in October 2025.