The UK's Competition and Markets Authority has opened a consultation on designating Microsoft with strategic market status in business software, following an investigation into personal computer operating systems, productivity suites, security software, server operating systems, and relational database management systems. The designation would allow the regulator to intervene without proving traditional anti-competitive wrongdoing, focusing instead on substantial and entrenched market power and barriers to switching.
The CMA says Microsoft has been the UK's largest business software provider for decades and that its portfolio functions as an integrated, end-to-end environment. Bundled pricing and technical integration make rival products harder for customers to adopt, the regulator argues, because switching would mean duplicating licensing costs. Proposed interventions include requiring Microsoft to ensure technical choices do not block alternative providers, limiting commercial bundling that harms competition, and preventing Microsoft from using its position to distort adjacent markets such as cloud services.
Microsoft has said it disagrees with the CMA's proposed decision, insisting its products, including Copilot, are open and interoperable and that customers can choose solutions that work best for them. In contrast, the Browser Choice Alliance says Microsoft uses its dominance to push users toward Edge, and the Open Cloud Coalition claims restrictive licensing distorts cloud competition and raises costs. The CMA is also examining whether customers can freely choose AI tools and whether alternative AI providers can compete fairly against Copilot, with regulators such as the US FTC and the European Commission watching the UK's next move.