IT Home, October 17: According to Reuters on October 16, the UK Competition and Markets Authority is planning to designate Microsoft as having a "strategic market position" in the business software market, which could empower regulators to intervene in Microsoft’s bundling practices involving products such as Excel, Teams, and the AI assistant Copilot.
In May of this year, the UK Competition and Markets Authority began investigating whether Microsoft’s position in the business software market impedes competition.
It is reported that Microsoft's business software has approximately 20 million users per month in the UK.
On that day, regulators noted that Microsoft holds a dominant position in the PC operating system market, as well as in the markets for office, security, server, and database management software, and that customers face significant barriers when switching to products from other suppliers, further reinforcing Microsoft's market advantage.
A Microsoft spokesperson disagreed with this conclusion: "All of our products, including Copilot, are designed with openness in mind and can interoperate with other services, allowing customers to use Microsoft products alongside those of our competitors."
The UK Competition and Markets Authority will next investigate whether customers can freely choose AI tools and whether other providers can compete with Copilot.
According to IT Home, regulators will also examine whether Microsoft’s practice of bundling security software with other products restricts customer choice, and how its software licensing model affects customers’ selection of cloud services.
Sarah Cardell, CEO of the UK Competition and Markets Authority, said that business software and cloud services are essential in workplaces across the UK, from small businesses to critical public services. “Businesses and organizations should be able to choose the products that best suit their needs, switch providers when necessary, and use services from multiple suppliers simultaneously. We aim to ensure that businesses can freely decide how to combine Microsoft products with other offerings.”
The UK Competition and Markets Authority will seek input from all parties on this proposal and make a final decision by February 2027.
If the proposal is approved, Microsoft will become the third company subject to the UK’s new digital markets regulatory regime. Previously, Google was designated as having strategic market status for its web search business; in October 2025, Google and Apple’s mobile platforms received the same designation.
Regulators also noted that Microsoft and Amazon Web Services (AWS) still need to further remove barriers for customers switching between cloud providers or using multiple cloud providers simultaneously.
The two companies have taken some measures to increase customer choice, including interconnecting their respective data centers with those of competitors and waiving data transfer fees when customers switch cloud providers. Regulators believe there is still room for improvement.
The UK Competition and Markets Authority will continue to work with both companies while assessing whether a formal investigation into the cloud services industry is necessary.
A Microsoft spokesperson said: “We welcome the UK Competition and Markets Authority’s recognition that Microsoft’s position in the cloud services market is insufficient to justify determining it as having strategic market status under the digital markets regime.”
AWS also welcomes the latest developments announced by regulators: "In 2026, we continue to invest in developing new capabilities in AI, multi-cloud services, and open standards to give customers greater autonomy when building and operating systems."