- Investigation will assess Microsoft's position in business
software and how this impacts UK businesses and public sector
organisations
- CMA considering potential competition concerns and whether
action is needed to promote customer choice in the event of a
final designation decision
- CMA wants to hear from businesses, including challenger tech
companies, customers and rivals about whether their choices may
be limited - including due to bundling, lack of interoperability
and default settings
The Competition and Markets Authority (CMA) has today launched a
strategic market status (SMS) investigation into Microsoft's
business software ecosystem and set out details of what the
investigation will cover. This is the fourth SMS investigation
opened by the CMA since the UK's digital markets competition
regime came into force in January 2025.
Hundreds of thousands of UK businesses and public sector
organisations use Microsoft's business software (such as Windows,
Word, Excel, Teams and increasingly Copilot) every day, with more
than 15 million commercial users across its ecosystem.
Microsoft's ecosystem is therefore important to the productivity
of the UK economy.
The business software sector is changing rapidly, with increased
AI functionality and a shift towards agentic AI in familiar
workplace tools. The UK will benefit most where customers can
access the best tools in the market, and mix and match software
and AI services from a broad range of competing suppliers. It is
therefore important that competition in business software is
working well.
The CMA has heard that UK customers may not always be able to
effectively combine software from Microsoft with that of other
providers, limiting their ability to get access to the best
products at the most 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. 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. This includes looking at how AI competitors are able
to integrate with Microsoft's business software, giving customers
access to AI software across suppliers to best suit their needs.
The investigation will examine Microsoft's provision of a range
of business software products used by UK organisations, including
productivity software, personal computer and server operating
systems, database management systems and security software.
An SMS designation would also allow the CMA to consider whether
to intervene on a key concern from its cloud market
investigation – particularly Microsoft's use of software
licensing which was found to be reducing competition in cloud
services.
The CMA wants to hear from organisations based in the UK and
around the world, including challenger tech companies, business
software customers and rivals (including those in the security
space) about their experiences.
Sarah Cardell, Chief Executive of the CMA, said:
Business software is a cornerstone of how the UK economy
functions, from small businesses to major public services and
infrastructure. Hundreds of thousands of customers in the UK rely
on Microsoft's systems, which is why it's so important to ensure
these services are delivering good outcomes.
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 organisations can
benefit from choice, innovation and competitive prices.
The CMA will take a proportionate and transparent approach to
this investigation which must be completed within 9 months. It
will now focus on engaging a wide range of stakeholders –
including customers, rivals and challenger tech – as well as
gathering evidence from Microsoft before reaching a decision on
whether to designate Microsoft with SMS by February 2027. The CMA
will consult publicly before reaching that decision.
Alongside the SMS investigation, the CMA announced in March
that it is engaging with a broad range of stakeholders to ensure
that AWS and Microsoft are delivering on steps they announced to
support customer choice in cloud, and to identify what other
action may be needed.
More information is available on the Microsoft business software
ecosystem case page.
Notes to editors
- The CMA has today published an SMS Investigation Notice and
an Invitation to Comment setting out the scope of its work, the
key issues it intends to explore, and questions where it would
particularly welcome views and evidence from stakeholders. The
deadline to respond is 11.55pm on 4 June 2026.
- SMS designation does not assume wrongdoing. If Microsoft were
designated, it could allow the CMA to consider targeted and
proportionate interventions to support competition, subject to
meeting the relevant legal tests. These could include conduct
requirements or pro‑competition interventions, informed by
evidence gathered during the investigation.
