UK watchdog to probe Microsoft business software over market dominance concerns

The CMA will investigate if Microsoft holds Strategic Market Status, potentially forcing changes to cloud licensing and how AI tools are integrated.

The UK’s Competition and Markets Authority will launch an investigation into Microsoft’s business software ecosystem in May this year. This move comes after the CMA worked with Microsoft in 2025 on issues it had over its cloud business. Now it wants to address issues it has with Microsoft’s business software practices.

The investigation into Microsoft will assess whether the Redmond giant has Strategic Market Status (SMS) in business software. The CMA said hundreds of thousands of UK businesses and public sector organizations depend on Microsoft’s business software, such as Windows, Word, Excel, Teams, and Copilot, every day.

By slapping Microsoft with an SMS label, it would allow the CMA to take action on Microsoft’s use of software licensing to reduce competition in the cloud. It would also allow it to ensure a level playing field as AI innovation reshapes competition in productivity software.

Commenting on this development, Sarah Cardell, Chief Executive of the CMA, said:

“An SMS designation would enable us to tackle remaining concerns around Microsoft’s licensing practices in cloud and would also enable us to ensure a level playing field as AI is rapidly embedded into everyday business software tools.

Through this package of actions, we’re driving changes across cloud and business software to make sure these markets are competitive and resilient for UK businesses and the public sector.”

The CMA said that the embedding of AI into workplace tools is a pivotal moment for the sector, and the implications for UK productivity are significant. It said that the UK will benefit the most if competitors can integrate with Microsoft’s business software so that organizations can mix-and-match AI to best suit their needs.

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Posted Wednesday 1 April 2026 at 5:59 am AEST (my time).

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