OSes
Brit regulator has ‘heard’ customers can’t always ‘effectively combine software from Microsoft with that of other providers’
The UK’s Competition and Markets Authority (CMA) is taking a closer look at Microsoft’s business software empire, launching a strategic market status investigation into the company’s ecosystem.
The probe, which is the fourth since the UK’s digital markets competition regime came into force last year, will determine whether Microsoft should be designated as having strategic market status, which would allow the CMA to implement interventions to support competition.
In March, the CMA announced that the investigation was coming. The regulator was concerned that Microsoft’s software licensing practices were reducing competition in the cloud.
In today’s announcement, the CMA said it had “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.”
Microsoft is no stranger to regulatory friction. In 2025, it described calls from AWS and Google for the UK competition regulator to “intervene and constrain the price” it charges customers to run wares on those rivals’ cloud plaforms as “extraordinary and unprecedented.”
Two year prior, Google branded Microsoft’s cloud software licensing a “tax” paid by customers as a penalty for not running Microsoft software on Azure infrastructure. It claims that Microsoft charges up to four times more, for example, to run Windows Server on GCP. AWS has previously moaned about this too.
As well as assessing whether Microsoft is using its position to limit customer choice, the CMA investigation “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.”
Microsoft is pushing Copilot AI into as many Microsoft 365 subscriptions as it can, even creating a new tier, E7, aimed specifically at AI services.
In a statement, Nicky Stewart, senior advisor to the Open Cloud Coalition – a trade association Microsoft previously dismissed as a Google lobby group – said:
“This investigation needs to be both rapid and conclusive. It must address Microsoft’s unfair licensing practices once and for all, giving the UK cloud market a level playing field and the confidence to innovate and invest for the long term.”
Reg readers should not expect results anytime soon. It took 21 months for the CMA to publish the results of an investigation into the UK cloud services market, in which it said Microsoft and AWS were using their dominance to harm UK cloud customers. It claimed Microsoft, for example, could have charged UK enterprise customers £500 million more annually to run its wares in AWS and Google clouds than they’d have paid to run them in Azure.
A key concern from that investigation – whether Microsoft’s software licensing practices were reducing competition in cloud services – has informed this one.
This latest inquiry must be completed within nine months, and a decision on designating Microsoft with SMS is scheduled to be reached by February 2027.
For its part, a Microsoft spokesperson told The Register, “We are committed to working quickly and constructively with the CMA to facilitate its review of the business software market.”
The investigation will be wide-ranging, encompassing productivity applications, operating systems, databases, and security software.
Sarah Cardell, Chief Executive of the CMA, said, “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 organizations can benefit from choice, innovation and competitive prices.”
Authorities in the US, Europe, Brazil, South Africa and Japan are also closely monitoring Microsoft’s licensing policies. ®
