UK CMA proposes strategic market status for Microsoft business software, eyes Copilot
The UK Competition and Markets Authority on October 16 proposed giving Microsoft a Strategic Market Status designation in business software and opened a consultation, with feedback due November 13 and a final decision expected by February 2027. The CMA said Microsoft holds a strong position in all five areas it examined — PC operating systems, productivity software, security software, server operating systems and relational database management — and that switching barriers and bundling practices may limit rivals. It will further examine whether customers can freely choose AI tools and whether competitors can take on Copilot, along with security-software bundling and how licensing affects cloud choice; Microsoft said all its products, including Copilot, are open and interoperable.
If the designation is confirmed, the regulator could move to intervene in how Microsoft bundles products such as Excel, Teams and Copilot and push for greater interoperability, making Microsoft the third company subject to the UK's digital-markets regime.
- CMA investigation finds that Microsoft has "a strong position" across five separate areas
- An ongoing investigation is also considering whether Copilot has an advantage
- Microsoft could have to make changes to licensing and improve interoperability
The UK's Competition and Markets Authority (CMA) is proposing to give Microsoft a Strategic Market Status (SMS) designation in the business software market as a result of an earlier investigation into its software practices and impact on competition.
Core to the investigation was the company's extensive software ecosystem, which customers reportedly find difficult to leave to switch providers.
According to the data, around 20 million people use Microsoft's software in the UK every month, including private businesses and public sector organizations.
CMA proposes labelling Microsoft with SMS in the UK
"Microsoft has a strong position across each of the 5 areas of digital activity that the CMA investigated," the CMA wrote. Those five areas include operating systems, productivity software, security software, server operating systems and database management systems.
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