The Competition and Markets Authority, Britain's competition regulator, proposed on Friday, Oct. 16, to designate Microsoft as having "strategic market status" in its business software. The label is for a company with a strong, lasting position that rivals can only partly check, and it would let the regulator consider rules made for that one company. The CMA says Microsoft's business products, which include Word, Excel, Outlook, PowerPoint, Teams and, increasingly, the Copilot AI assistant, along with its security, server and operating system software, are used by more than a million UK businesses and public bodies, with around 20 million monthly users. Its provisional findings say customers face barriers when they try to switch away from Microsoft, which limits their choice.
The regulator points to AI. It says workplace software is changing fast as AI features spread, and that customers gain most when they can mix and match software and AI services from competing suppliers. If Microsoft is designated, one of the areas the CMA plans to study is whether rival makers of AI tools for office software can connect to Microsoft's products, work alongside them and be found and used from inside them, and whether those rivals have a level playing field against Copilot. The CMA calls this a fast-moving area and says it needs more evidence.
The other areas are whether customers can choose which company's cloud, meaning rented online computers, runs the Microsoft software they license; Teams, Microsoft's chat and video-call app; and how Microsoft bundles its security products, which the CMA is still deciding whether to pursue. In 2025 the European Commission, the European Union's executive arm, accepted promises from Microsoft on Teams, including selling it separately, but those promises do not formally apply in the UK, and the CMA says it will consider whether action is needed there.
The proposal changes nothing yet, and the CMA says the label would not find or assume any wrongdoing by Microsoft. Under a 2024 UK law on digital markets, it would let the regulator consider targeted measures, such as rules on how Microsoft must behave, as long as they meet legal tests, and the CMA says it would consult on any measure before imposing it. "Organisations should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers," said Sarah Cardell, the CMA's chief executive. Businesses and others can send views on the proposal until 5 p.m. on Nov. 13, and on the roadmap by the same day, and the final decision is due by Feb. 13, 2027.
During the investigation, Microsoft has argued that it works in a "vigorously competitive" market, according to a news report. The CMA says it has not yet reached a view on what measures, if any, to propose, so it is not yet clear whether Copilot would have to change, or whether rival AI tools would get easier access to Word, Excel or Teams.