The Competition and Markets Authority has proposed giving Microsoft’s business-software ecosystem strategic market status, opening a consultation on a decision that could shape how workplace software competes in the UK. The proposal, published on 16 October, is provisional: designation has not been confirmed and no new restrictions have been imposed.
The consultation is open until 5pm on 13 November. The regulator must issue its final decision by 13 February 2027. It is considering Microsoft’s position across five areas: personal computer operating systems, productivity software, security software, server operating systems and relational database management systems.
The provisional assessment identifies Microsoft’s strong position in each area and barriers facing customers switching to alternatives. Commercial practices and product integration are also identified as factors that can encourage organisations to use Microsoft services and make it harder for rival developers to compete. These are provisional findings, and the consultation gives affected organisations and other interested parties an opportunity to respond before a final decision.
The scale of use helps explain why the case reaches beyond technology suppliers. Microsoft’s business products are used by more than one million businesses and public-sector organisations in the UK, with around 20 million monthly users. The software includes familiar workplace tools such as Word, Excel, Outlook, PowerPoint and Teams, as well as security, server and operating-system products. These services support critical workplace functions.
Artificial intelligence is central to the questions set out for further examination. The regulator plans to assess whether customers can choose the AI tools and functions best suited to their needs, and whether providers competing with Microsoft’s Copilot have a fair opportunity to reach customers. The proposed approach to AI features in established workplace products would enable organisations to combine services from different suppliers rather than being limited to one technology provider.
Other proposed areas of scrutiny concern the way security products are bundled and whether organisations have effective choice over the cloud services on which they run software licences. These are subjects for further evidence gathering, not settled conclusions or remedies. The regulator’s indicative roadmap identifies possible lines of inquiry if designation is confirmed; it does not itself impose changes on Microsoft or require customers to switch products.
Strategic market status is a regulatory designation under the UK’s digital markets regime. Such a designation does not assume wrongdoing. If it makes the designation, it could then consider targeted conduct requirements or other pro-competition interventions, subject to the relevant legal tests. Any such action would be a separate step from the decision now under consultation.
Microsoft has disputed the regulator’s assessment, saying its products are open and interoperable and can be used alongside competing services. That position remains part of a live consultation rather than a resolution of the issues. Responses are due by 13 November, after which the regulator may gather further evidence and consider representations before its February deadline.
The case also includes a separate update on cloud services. Microsoft and Amazon Web Services have taken steps intended to make it easier for customers to use more than one provider or move between providers. Those steps include removing data-transfer fees for customers switching cloud providers, linking data centres with rivals and introducing a process for customers and competitors to request greater interoperability. The remaining barriers under examination include identity and access management and moving portable cloud arrangements between providers. It will continue engagement on those issues and plans another update in spring 2027, while keeping open the possibility of a separate formal investigation.
The consultation therefore covers both an immediate question about Microsoft’s market position in business software and a later process for deciding whether any intervention is justified. The next decision is not whether the regulator has proved misconduct, but whether the statutory test for designation is met after considering the responses and evidence.
