Microsoft Could Face Tougher U.K. Scrutiny Over Business Software Dominance — Update

By Edith Hancock

The U.K.'s competition regulator said it could put Microsoft under tougher scrutiny, citing concerns over the market power the tech giant wields in the business software space through tools such as Excel and Copilot.

As artificial intelligence drives rapid change across the sector, business software customers benefit most when they can mix and match services with competing suppliers, the Competition and Markets Authority said Friday.

Microsoft's tools such as Word, Excel and Copilot have roughly 20 million monthly users in the U.K., the CMA said. It said the U.S. software company's strength comes from barriers customers face when switching to other companies' services.

These factors could lead the watchdog to designate Microsoft as having strategic market status in the business software industry under the country's digital competition rules. This designation gives the CMA powers to impose conduct requirements on companies linked to their business practices.

Microsoft said it disagreed with a potential designation, and that its products are interoperable. "We will continue engaging constructively to ensure U.K. customers and businesses carry on benefiting from robust competition," the company said Friday

The CMA said it is seeking feedback on the potential strategic market status designation until Nov. 13 and has a deadline of Feb. 13 to designate the company with strategic market status.

The regulator said it would look into whether alternative AI software providers have a level playing field to compete with Microsoft's Copilot, whether the way Microsoft bundles and integrates its security products limits customer choice and whether Microsoft's licensing practices impact how customers can choose the cloud they deploy their software licenses on.

Organizations should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers," Sarah Cardell, the CMA's chief executive, said in a statement Friday. "We want to ensure businesses have the freedom to choose how they use Microsoft's products alongside alternatives," she said.

The watchdog said in March that it would investigate Microsoft's position in the business software ecosystem under the U.K.'s digital competition rulebook.

Microsoft and Amazon Web Services had previously offered commitments to the CMA linked to an earlier probe on their positions in the cloud services space. "Meaningful improvements have already been made, with more to come and we're continuing to work with both companies to agree further actions," CEO Cardell said.

The CMA said Friday that more can be done to address existing hurdles for customers switching between cloud providers and using multiple cloud services.

AWS said it welcomed the outcome of the CMA's review, "which recognizes the concrete steps AWS has taken to enhance customer choice and flexibility in the U.K."

The regulator said it would continue to work with the companies and will provide a further update on that process in spring 2027.

Write to Edith Hancock at edith.hancock@wsj.com

(END) Dow Jones Newswires

October 16, 2026 08:09 ET (12:09 GMT)