The UK’s CMA is coming for Copilot, Teams, and Excel – and Microsoft has nine months to fight back

The Competition and Markets Authority opened a strategic market status investigation into Microsoft’s business software empire on Thursday (14 May), training its newest regulatory weapon on Windows, Office, Teams and Copilot – the systems sitting on the desks of more than 15 million UK commercial users every working day.

This is the fourth SMS investigation the CMA has fired off since the UK’s digital markets competition regime switched on in January 2025, and it’s the broadest yet.

Google has already been designated twice, over search and its mobile platform, and Apple once over its mobile platform. Microsoft is target number four, and the clock now ticks down to a designation decision due by February 2027.

The fourth strike

Sarah Cardell, the CMA’s Chief Executive, said business software is “a cornerstone of how the UK economy functions, from small businesses to major public services and infrastructure”. She framed the investigation as proportionate and transparent. Redmond will have its own view on that.

The legal test the CMA has to satisfy is whether Microsoft holds “substantial and entrenched market power” alongside a “position of strategic significance” in the digital activities under review.

Windows runs the overwhelming majority of British office PCs. Microsoft 365 is the default productivity stack across UK corporates and Whitehall departments. If any tech firm meets the bar, it’s the one in the dock.

What the CMA actually wants to know

The investigation goes after the unglamorous mechanics that quietly lock UK businesses into the Microsoft stack: product bundling, limited interoperability with rival software, and default settings that make switching feel like more trouble than it’s worth.

The regulator wants to hear from challenger tech companies, customers and rivals about whether their choices have been narrowed by any of the above.

The scope is sweeping. Productivity software, PC and server operating systems, database management systems and security software are all on the table.

If you run an IT budget at a UK firm, there is a strong chance every layer of your stack just landed inside a regulator’s case file. The Invitation to Comment closes at 11.55pm on 4 June 2026, which means rivals and customers have around three weeks to file the evidence that could shape the next decade of British enterprise IT.

The Copilot question

Microsoft has spent the past 18 months stitching Copilot into every corner of its commercial product line, and the CMA has noticed.

The investigation will examine how rival AI providers can, or cannot, integrate with Microsoft’s business software, with the regulator flagging a “shift towards agentic AI in familiar workplace tools” as part of the rationale for moving now.

Translation: the CMA does not want to wake up in 2028 and find that Copilot is the only AI assistant that talks fluently to Outlook, Excel and Teams. The agency wants the plumbing checked before the concrete sets.

Cloud licensing comes back around

There’s a second front buried in the announcement. The CMA’s 2025 cloud services market investigation found that Microsoft’s software licensing practices were reducing competition in cloud, with both Microsoft and AWS holding 30% to 40% shares of the UK infrastructure-as-a-service market.

A fresh SMS designation would let the regulator act on that finding directly.

In March, both AWS and Microsoft handed over voluntary commitments on cloud egress fees and interoperability, and the CMA is currently watching whether those land. The Board will review progress in six months. Designation would give the regulator considerably sharper teeth than voluntary undertakings ever can.

Nine months on the clock

If the CMA designates, conduct requirements and pro-competition interventions become available, the kind of targeted obligations already reshaping Apple’s App Store rules under similar regimes across Europe. Designation lasts five years. The regulator doesn’t need to prove historic harm to act. The regime is forward-looking by design.

Microsoft is not being accused of wrongdoing. It is being told that its position is now significant enough to warrant a rulebook of its own. Nine months. Four product categories. Fifteen million users. The CMA has set the timer, and every British business that types into Word, opens Excel or joins a Teams call now has a stake in the answer.

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