Microsoft Under Investigation for Breaches of Law in the UK
A reader has sent us these "highly relevant" news reports (from or about Competition and Markets Authority). We mentioned this in IRC some days ago; one come from a blogger (not law firm) ("UK competition regulator investigates Microsoft") and another directly from the British government. Quoting the press release:
CMA [Competition and Markets Authority] launches strategic market status investigation into Microsoft’s business software ecosystem
CMA sets out scope of its investigation to determine whether Microsoft should be designated with strategic market status for its business software ecosystem.
- Investigation will assess Microsoft’s position in business software and how this impacts UK businesses and public sector organisations
- CMA considering potential competition concerns and whether action is needed to promote customer choice in the event of a final designation decision
- CMA wants to hear from businesses, including challenger tech companies, customers and rivals about whether their choices may be limited - including due to bundling, lack of interoperability and default settings
The Competition and Markets Authority (CMA) has today launched a strategic market status (SMS) investigation into Microsoft’s business software ecosystem and set out details of what the investigation will cover. This is the fourth SMS investigation opened by the CMA since the UK’s digital markets competition regime came into force in January 2025.
Hundreds of thousands of UK businesses and public sector organisations use Microsoft’s business software (such as Windows, Word, Excel, Teams and increasingly Copilot) every day, with more than 15 million commercial users across its ecosystem. Microsoft’s ecosystem is therefore important to the productivity of the UK economy.
The business software sector is changing rapidly, with increased AI functionality and a shift towards agentic AI in familiar workplace tools. The UK will benefit most where customers can access the best tools in the market, and mix and match software and AI services from a broad range of competing suppliers. It is therefore important that competition in business software is working well.
The CMA has heard that UK customers may not always be able to effectively combine software from Microsoft with that of other providers, limiting their ability to get access to the best products at the most competitive prices. The CMA’s investigation will examine whether Microsoft has SMS in business software and consider whether it can use that position to limit customer choice. It will assess whether bundling of products, limits in interoperability or default settings can prevent customers switching and weaken the competitive constraints Microsoft faces from rivals. This includes looking at how AI competitors are able to integrate with Microsoft’s business software, giving customers access to AI software across suppliers to best suit their needs.
The investigation will examine Microsoft’s provision of a range of business software products used by UK organisations, including productivity software, personal computer and server operating systems, database management systems and security software.
An SMS designation would also allow the CMA to consider whether to intervene on a key concern from its cloud market investigation – particularly Microsoft’s use of software licensing which was found to be reducing competition in cloud services.
The CMA wants to hear from organisations based in the UK and around the world, including challenger tech companies, business software customers and rivals (including those in the security space) about their experiences.
Sarah Cardell, Chief Executive of the CMA, said:
Business software is a cornerstone of how the UK economy functions, from small businesses to major public services and infrastructure. Hundreds of thousands of customers in the UK rely on Microsoft’s systems, which is why it’s so important to ensure these services are delivering good outcomes.The CMA will take a proportionate and transparent approach to this investigation which must be completed within 9 months. It will now focus on engaging a wide range of stakeholders – including customers, rivals and challenger tech – as well as gathering evidence from Microsoft before reaching a decision on whether to designate Microsoft with SMS by February 2027. The CMA will consult publicly before reaching that decision.Our aim is to understand how these markets are developing, Microsoft’s position within them and to consider what, if any, targeted action may be needed to ensure UK organisations can benefit from choice, innovation and competitive prices.
Alongside the SMS investigation, the CMA announced in March that it is engaging with a broad range of stakeholders to ensure that AWS and Microsoft are delivering on steps they announced to support customer choice in cloud, and to identify what other action may be needed.
More information is available on the Microsoft business software ecosystem case page.
Microsoft ought to be barred from the UK for being a national security risk. █