Britain’s competition regulator has proposed designating Microsoft as having strategic market status in business software, a move that could lead to tighter scrutiny of how the technology giant bundles products such as Excel, Teams and its Copilot artificial intelligence assistant.
The Competition and Markets Authority (CMA) said on Friday that Microsoft held a strong position across personal computer operating systems, productivity tools, security software, server systems and database management, with barriers making it difficult for customers to switch providers.
The proposed designation follows an investigation launched in May into whether Microsoft’s position in business software, used by about 20 million people monthly in Britain, was limiting competition.
If approved, the designation would give the regulator greater powers to impose requirements aimed at improving competition and ensuring businesses have more freedom to choose software and digital services.
The CMA said it would examine whether customers could freely choose AI tools from competing providers and whether Microsoft’s integration of Copilot into its products could make it harder for rivals to compete.
It will also assess whether the company’s bundling of security products restricts customer choice and how its software licensing practices affect businesses seeking alternative cloud services.
CMA Chief Executive Sarah Cardell said business software and cloud services were essential to workplaces across Britain, from small businesses to critical public services.
She said organisations should be able to select products that meet their needs, switch providers when necessary and combine services from different suppliers.
The regulator will invite responses to its proposed designation before making a final decision by February.
Microsoft rejected the CMA’s assessment, saying its products, including Copilot, were open and interoperable and could be used alongside competing services.
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If designated, Microsoft would become the third company subject to Britain’s new digital markets competition regime. Google’s parent company, Alphabet, has already received a strategic market designation for online search, while Google and Apple were designated in mobile platforms in October 2025.
The CMA said it would also continue pressing Microsoft and Amazon Web Services (AWS) to address remaining barriers that make it difficult for businesses to switch cloud providers or use services from multiple suppliers.
Both companies have taken steps to improve customer choice, including connecting their data centres with rival providers and removing data transfer fees for customers moving between cloud services.
However, the regulator said further improvements were possible and that it would continue engaging with both companies while retaining the option of opening a formal cloud-sector investigation.
Microsoft welcomed the CMA’s acknowledgement that its position in cloud services did not warrant a strategic market designation under the digital markets regime.
AWS also welcomed the update, saying it had continued investing in artificial intelligence, multicloud services and open standards to give customers greater control over how they build and operate their systems.
The proposed action reflects Britain’s broader efforts to ensure that dominant technology companies do not use their market positions to restrict competition as AI becomes increasingly integrated into workplace software and cloud computing.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
