The Competition and Markets Authority (CMA) has unveiled a sweeping regulatory package aimed at overhauling the UK’s business software and cloud services sectors. This move is designed to foster greater competition and consumer choice at a time when the rapid integration of artificial intelligence is fundamentally reshaping the digital economy. Central to this announcement is the CMA Board’s decision to launch a Strategic Market Status (SMS) investigation into Microsoft’s business software ecosystem, a process scheduled to begin in May.
This investigation is a pivotal application of the UK’s Digital Markets Competition Regime. By pursuing an SMS designation, the regulator seeks the authority to address long-standing concerns regarding Microsoft’s licensing practices. The CMA has previously identified these practices as barriers that stifle competition within the cloud sector. Regulators are particularly focused on ensuring a level playing field as advanced AI assistants and agentic technologies are embedded into ubiquitous workplace tools like Windows, Teams, and Excel. The goal is to ensure that UK businesses and government bodies can mix and match AI solutions from various providers rather than being locked into a single ecosystem.
Parallel to the upcoming Microsoft investigation, the CMA has secured material concessions from both Microsoft and Amazon regarding cloud infrastructure. Following intensive engagement with the regulator, both tech giants have committed to taking steps to reduce cloud egress fees—the costs associated with moving data out of a provider’s network—and to improve interoperability. These changes are intended to make it significantly less expensive and technically difficult for UK organizations to utilize multiple cloud providers simultaneously, thereby enhancing the resilience of the nation’s technological infrastructure.
Sarah Cardell, Chief Executive of the CMA, explained that this multifaceted approach is both proactive and pragmatic. While acknowledging the progress made on egress fees, she made it clear that the regulator expects further action to facilitate easier switching between services. The CMA intends to maintain an active dialogue with industry stakeholders and will review the progress of these voluntary measures in six months.
The 2025 cloud investigation showed just how much power Amazon and Microsoft really have, and the CMA isn’t sitting back. With AI moving so fast, they’re stepping in now to stop these giants from locking everyone in. By clearing out technical hurdles and keeping monopolies in check, the goal is to make sure UK businesses actually get fair prices and a real choice in the latest tech.
