UK watchdog proposes tougher scrutiny of Microsoft software
It says it will decide by February whether to designate the company with strategic market status
The UK's Competition and Markets Authority (CMA) is considering imposing stricter oversight on Microsoft, the global software giant, due to its dominant position in business software. The watchdog is set to determine by February whether Microsoft should be designated with strategic market status, which would grant it the power to intervene in areas such as cloud licensing, AI productivity tools, and security software.
Microsoft's strong market position in business software stems from the challenges customers face when switching providers, thereby limiting their choices and weakening the competitive landscape for other software developers, the CMA stated on Friday, October 16. This proposal adds to the growing regulatory hurdles Microsoft faces in the UK, three years after a contentious regulatory battle over the US$69 billion acquisition of Activision Blizzard.
The CMA is concurrently examining whether Microsoft misled customers into paying higher prices for its software subscriptions after integrating its Copilot AI product into the package. Microsoft maintains that it does not concur with the CMA's assessment for its proposed decision on business software solutions.
In a statement, Microsoft emphasized that all its products, including Copilot, are open and interoperable, enabling customers to utilize them alongside competing services. The CMA initiated the investigation earlier in 2026, spurred by concerns regarding Microsoft's dominant position in business software, encompassing productivity software, operating systems, and database management. The software, which includes Word, Outlook, and Copilot, is utilized by approximately 20 million UK users monthly.
The watchdog is investigating whether Microsoft's bundling and integration of security products constrain customer choice. The CMA aims to delve deeper into potential interventions on software bundling and enhance customer choice, particularly regarding alternative AI providers to Microsoft's Copilot.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
