The UK Competition and Markets Authority (CMA) has announced its proposal to designate Microsoft with strategic market status (SMS) within its business software ecosystem, initiating a formal consultation period ahead of a final decision expected by February 2027. According to the press release, Microsoft’s business and public sector tools—including Word, Excel, Outlook, Teams, and Copilot—support over a million organizations and 20 million monthly users across the UK. The CMA’s provisional findings indicate that Microsoft maintains a strong position across five key areas of digital activity, bolstered by high switching barriers, software bundling practices, and integration advantages that limit genuine customer choice and constrain competing developers.

To promote competition and strategic autonomy, the CMA has published an indicative roadmap detailing areas for potential future interventions if Microsoft is formally designated. These proposed investigations focus on ensuring a level playing field for alternative AI providers against Microsoft’s Copilot, evaluating whether security product bundling restricts user options, and determining whether customers have effective choice over software license deployment across cloud platforms. CMA Chief Executive Sarah Cardell emphasized that businesses and public sector organizations should be able to easily switch providers, mix and match services from different suppliers, and avoid over-reliance on a single technology provider.

In a separate update regarding cloud services monitoring, the CMA highlighted ongoing engagement with both Microsoft and Amazon Web Services (AWS) to improve market conditions outside of formal designation. While both companies have already taken material steps—such as eliminating data transfer fees for switching providers, connecting data centres with rivals like Google, and introducing interoperability request mechanisms—the regulator noted that further improvements are necessary. The CMA intends to continue working with Microsoft and AWS to address remaining barriers regarding cross-cloud identity management and architecture portability, with a follow-up update scheduled for Spring 2027.