Microsoft to face UK competition probe over business software practices
The tech giant could be designated with strategic market status, meaning it holds undue sway over the UK software ecosystem
The UK Competition and Markets Authority (CMA) has launched a strategic market status (SMS) investigation into Microsoft’s software licensing practices.
The probe, which the regulator touted in late March, aims to establish whether the tech giant’s position in the market has a negative impact on competition and consumer flexibility.
In a statement announcing the move, the CMA said the probe will primarily focus on business software products used by organisations across the country, including:
- Productivity software
- Personal computer and server operating systems
- Database management systems
- Security software
Microsoft business products, which include Windows, Word, Excel, Teams, and Copilot, are used by hundreds of thousands of firms and public sector organizations across the country, the CMA noted, with more than 15 million commercial users.
The regulator highlighted concerns that UK customers “may not always be able to effectively combine software from Microsoft with that of other providers”. This, it said, could limit their ability to access preferred products at 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,” the CMA said.
“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.”
Notably, the CMA said its decision to launch the probe comes in the wake of a previous investigation into the UK cloud services market.
The regulator’s lengthy probe found the dominance of hyperscalers including Microsoft and Amazon Web Services (AWS) had a negative impact on competition in the UK market.
Microsoft has repeatedly faced scrutiny over its software licensing practices. Slack, for example, filed an EU complaint in 2020 amid claims the company had engaged in anticompetitive behavior with Teams bundling practices.
EU-based trade group, Cloud Infrastructure Services Providers in Europe (CISPE), filed a similar complaint in 2022, alleging that Microsoft imposed higher charges for customers running software on rival cloud platforms.
Microsoft and CISPE agreed to a settlement in mid-2025, which was met with criticism by other industry groups.
CMA seeks business feedback
This latest probe into Microsoft practices must be completed within nine months, according to the regulator. A decision on whether to designate the tech giant with strategic market status is expected by February 2027.
In the meantime, the CMA said plans to gauge the thoughts of businesses across the country using Microsoft products, as well as challenger companies, over whether product choices may be limited.
This includes concerns surrounding product bundling, lack of interoperability, and default settings used by the company.
“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 organizations can benefit from choice, innovation and competitive prices,” said Sarah Cardell, chief executive of the CMA.
A spokesperson for Microsoft told ITPro: "We are committed to working quickly and constructively with the CMA to facilitate its review of the business software market."
FOLLOW US ON SOCIAL MEDIA
Follow ITPro on Google News and add us as a preferred source to keep tabs on all our latest news, analysis, views, and reviews.
You can also follow ITPro on LinkedIn, X, Facebook, and BlueSky.
-
How Welsh councils are improving services with Microsoft CopilotCase study AI use has reduced staff toil, improved customer service, and increased team collaboration at three Welsh councils
-
MSI Prestige 16 AI+ reviewNews A perfectly balanced productivity laptop at a price that will make the IT department bean counters dance with joy
-
Big tech earnings: Hyperscaler growth rates impress, but concerns remain over surging infrastructure capexNews Concerns remain over big tech infrastructure spending despite positive earnings reports
-
Microsoft, Amazon cloud practice changes spark mixed industry reactionNews Concerns have been raised over the voluntary actions agreed to by Microsoft and Amazon
-
Microsoft says fear of falling behind is driving an AI arms race among UK businesses – and it's fueling record adoption ratesNews New research shows AI is now a core part of UK business success strategies
-
January rundown: Amazon layoffs and the return of XPSITPro Podcast This year's tech layoffs have just begun, as Amazon sheds 16,000 workers in one go
-
Are hyperscalers backing out of Net Zero?ITPro Podcast Expanding data center construction and demand for high-energy workloads are pushing hyperscalers off course on carbon
-
Pax8 and Microsoft are teaming up to supercharge MSP growthNews The new agreement includes integration between Pax8 and Microsoft Marketplace alongside a new OneCloud Guided Growth enablement initiative
-
Microsoft and Nvidia are teaming up again to support UK startupsNews Agentic Launchpad will offer participants AI expertise, training and networking, and marketing support
-
Microsoft’s huge AI spending still has investors sweating despite solid cloud growthNews Capital spending at Microsoft continues to surge, despite previous claims it would cool down
