The UK’s Competition and Markets Authority (CMA) has launched a significant investigation into Microsoft’s extensive business software ecosystem. This probe, initiated on May 14, 2026, under the Digital Markets Competition and Consumers Act 2024, could lead to new regulations for the tech giant’s operations in the UK.
Key Takeaways
- The CMA is investigating Microsoft’s business software, including productivity suites, operating systems, and security software.
- The probe aims to assess potential competition concerns within Microsoft’s integrated software offerings.
- Microsoft could face new conduct requirements or voluntary commitments if competition issues are confirmed.
Broad Scope of Investigation
The CMA’s strategic market status investigation (SMSI) encompasses a wide array of Microsoft products provided to business and public sector users. This includes the Productivity Software Suite (Office 365 applications like Word, Excel, Teams, and Copilot features), PC Operating System (Windows 10, 11, and future versions), Server Operating System (Windows Server), Relational Database Management System (SQL Server), and Security Software (Entra, Active Directory, Intune, Defender).
The investigation also considers the integration of Microsoft’s AI products, such as Copilot, across its technology stack. The CMA is examining whether these diverse digital activities can be grouped as a single "Microsoft’s Business Software Ecosystem," given how the company markets them as an integrated solution. Initial evidence suggests Microsoft holds significant market share, potentially above 70% in several areas, with substantial switching costs for customers due to product integration and network effects.
Issues Under Consideration
The CMA is exploring several key areas of concern:
- Leveraging Market Power: How Microsoft might use its dominance in business software to gain an advantage in adjacent markets, such as cloud services.
- Technical Design and Interoperability: Issues related to technical tying, asymmetric API access for competing products on Windows, and Microsoft’s control over de facto standards.
- Commercial Practices: Examining pricing structures, bundling, and tying strategies that may limit consumer choice and foreclose third-party competitors.
- Defaults and Design Choices: How features within Microsoft products, including Windows, steer users towards specific offerings, potentially undermining effective choice.
The CMA has nine months to decide whether to designate Microsoft as having strategic market status. Following this, Microsoft could be subject to bespoke conduct requirements or may offer voluntary commitments to address the CMA’s concerns. The investigation follows similar probes into Apple and Google’s mobile platforms, signalling a proactive approach by the CMA to regulate the digital market.
