Microsoft in the crosshairs of UK regulators
Key Points
- The CMA plans to designate Microsoft with strategic market status in business software
- Microsoft’s software serves over a million UK organisations and 20 million monthly users
- The regulator will examine Copilot competition, security bundling and cloud licensing
- A final decision is due by February 2027 after consultation
- Microsoft and AWS have scrapped data transfer fees for switching cloud provider
The Competition and Markets Authority (CMA) has announced that it will give Microsoft strategic market status in business software. This includes its massively popular Microsoft Word, Excel, Outlook, PowerPoint, Teams, and Copilot.
The CMA estimates that some 20 million people in the UK use these products every month. The designation would place Microsoft alongside Apple and Google and their respective mobile platforms.
The regulator found that Microsoft holds a strong position across all five areas:
- Personal computer operating systems
- Productivity software suites
- Security software
- Server operating systems
- Relational database management systems
The CMA specifically flagged how hard it was to switch from Microsoft products, which effectively limited choice and weakened competition with rivals.
Another concern is that Microsoft’s commercial practices and integration across its software are actively pushing customers towards its products.
Copilot concerns
Notably, the regulator outlined the areas where it could intervene if it did decide to go after Microsoft, notably Copilot. This includes whether customers can freely choose their own AI tools, and whether competitors can fairly compete.
“Organisations should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers,” said Sarah Cardell, chief executive of the CMA.
“We’re now consulting on whether to designate Microsoft with strategic market status. If we do, our focus would be on promoting competition and giving businesses greater freedom to choose and combine products in business software,” Cardell added.
The CMA said designation does not assume any wrongdoing on Microsoft’s part.
If the regulator designates Microsoft, it could impose conduct requirements or pro-competition interventions, subject to meeting the relevant legal tests.
