The watchdog links Microsoft’s strength to barriers customers face when switching software and proposes a designation that could enable action on product bundling.
The UK’s Competition and Markets Authority (CMA) proposed on 16 October giving Microsoft “strategic market status” in business software, a designation that could allow targeted competition measures. Its accompanying roadmap sets out further scrutiny of competing tools, security-product bundles and customers’ choice of cloud provider. The findings remain provisional, and any intervention would require designation and further legal tests.
The proposal follows an investigation launched in May into whether Microsoft’s business-software bundling—packaging products together—was uncompetitive. Products including Excel, Teams and the Copilot AI assistant could face scrutiny. Microsoft’s business software serves more than a million UK businesses and public sector organisations, with around 20 million monthly users.
The roadmap identifies three areas where the CMA proposes to gather more evidence before considering possible action:
The CMA is also considering how to make it easier for other developers to integrate their products with Microsoft’s business software. The regulator says greater choice and competition could lower prices for businesses and public sector organisations while supporting innovation.
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The CMA provisionally found that Microsoft has a strong position in all five areas it investigated: personal-computer operating systems, productivity software suites, security software, server operating systems and relational database management systems. Productivity suites combine workplace tools; relational database systems store and organise data in linked tables.
The regulator attributes Microsoft’s strength to barriers that make switching providers difficult, limiting customer choice and weakening competition from other developers. It also says Microsoft’s commercial practices and integration advantages can encourage customers to adopt more of its products, creating barriers rivals cannot easily overcome.
Microsoft disputed the CMA’s views in the proposed decision. A company spokesperson said its products can work alongside competing services:
All our products — including Copilot — are open and interoperable, giving customers the ability to use them alongside competing services.
Separately, the CMA reports changes following its engagement with Microsoft and Amazon Web Services (AWS) outside a formal designation process. The regulator began that work in March to monitor promised improvements in customers’ ability to choose cloud services.
The CMA says both businesses have removed data-transfer fees for customers changing cloud providers and reduced those fees for customers using more than one provider. It also reports a new mechanism through which customers and competitors can request that services work together more easily.
The companies are connecting their data centres with rivals, beginning with Google, and rolling out AI tools to automate technical steps needed to switch, according to the CMA.
The regulator says barriers to switching and using multiple cloud providers remain. Further work agreed with AWS and Microsoft will focus on identity and access management—the systems that control who can use services—across different clouds. It will also address barriers to deploying and moving systems designed to work across providers.
The CMA will publish another cloud-services update in spring 2027 and is keeping a full strategic-market-status investigation into cloud services under review.
If designated, Microsoft would become the third company subject to the UK’s new digital market powers. Google received strategic market status for online search and mobile platforms in October 2025, while Apple received it for mobile platforms that month.
Designation does not establish wrongdoing or itself require changes to Microsoft’s product bundles. It could allow the CMA to consider conduct requirements or other targeted measures to support competition, subject to the relevant legal tests.
The CMA is inviting views on both the proposed designation and the roadmap before making its final designation decision by the statutory deadline in February 2027.
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Adds the CMA’s roadmap, the February 2027 decision deadline and reported cloud-switching improvements, while clarifying that designation would not establish wrongdoing.
