UK competition regulator targets Microsoft’s business software grip

Britain’s Competition and Markets Authority (CMA) has proposed designating Microsoft as having strategic market status in business software, potentially opening the door to regulatory interventions into how the company bundles its products. The CMA launched an investigation in May to determine if Microsoft’s dominance in software used by around 20 million people a month in Britain is uncompetitive.

The regulator found Microsoft held strong positions in operating systems, productivity, security, server, and database management software, citing barriers to customer switching. Microsoft disputed the CMA's stance, stating its products are open and interoperable, allowing customers to use them alongside competing services. The CMA will investigate customer choice in AI tools, competition with Copilot, the impact of Microsoft’s bundling on choice, and licensing practices affecting cloud options.

CMA Chief Executive Sarah Cardell emphasized the importance of allowing organizations to choose and switch products freely. If designated, Microsoft would be the third company under Britain’s new digital market powers, following Google and Amazon. The CMA also called on Amazon Web Services to address barriers to switching cloud providers and using multiple services.

Microsoft and AWS welcomed the CMA's acknowledgment that their cloud market positions do not warrant designation under the Digital Markets Competition Regime.