UK regulator moves to designate Microsoft in business software market

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UK regulator targets Microsoft

Highlights

The UK Competition and Markets Authority proposes granting Microsoft 'strategic market status' in business software after an investigation into potential anti-competitive bundling practices.
Microsoft's business software reportedly reaches about 20 million UK monthly users, with the CMA citing barriers preventing customers from switching providers and concerns around the bundling of AI tools and security products.
If confirmed by February, Microsoft would become the third company subject to the UK's new digital market powers, following Google and Apple in October 2025.

CMA proposal targets bundling and switching barriers

As reported by Reuters, the Competition and Markets Authority said on Friday that it proposes to give Microsoft "strategic market status" in business software after opening an investigation in May into whether the company's bundling practices are uncompetitive.

The regulator says Microsoft's business software reaches about 20 million monthly users across the UK and that the company holds a strong position in key digital activities, including personal computer operating systems and productivity software suites. It adds that Microsoft's strength in business software is reinforced by barriers that make it difficult for customers to switch providers.

The CMA is also assessing whether customers can freely choose AI tools and whether rivals can compete with Copilot. It is further examining whether Microsoft's bundling of security products limits choice and whether its licensing practices affect customers' cloud deployment options.

A Microsoft spokesperson says the company does not share the CMA's view in the proposed decision. The spokesperson says all of its products, including Copilot, are open and interoperable, allowing customers to use them alongside competing services.

Decision would extend UK's digital market powers

The regulator will invite views on the proposed designation before making a final decision by February. If confirmed, Microsoft would become the third company brought under Britain's new digital market powers.

Google received strategic market status in online search and mobile platforms, while Apple received the same designation in mobile platforms, all in October 2025. In June this year, the CMA imposed new conduct requirements on Google's search services, including a measure allowing publishers to stop their content being used for the company's AI features, and it also ordered greater transparency on how search rankings work.

Our earlier article covered TikTok’s challenge to its designation as a gatekeeper under the EU’s Digital Markets Act, after a top court adviser backed regulators and recommended dismissing ByteDance’s action. We noted that the opinion strengthens the European Commission’s position and could push TikTok toward complying with stricter obligations, with a final ruling expected in the coming months.

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