Analysis
The UK's Competition and Markets Authority has proposed designating Microsoft as holding "strategic market status" in business software, a status that would let the regulator intervene directly in how the company bundles Word, Excel, Outlook, PowerPoint, Teams, and its security, server, and database products, according to The Register. The CMA stresses that a designation "would not imply wrongdoing" by Microsoft on its own.
The investigation, opened in May 2026, found Microsoft holds a strong position in five separate markets: PC operating systems, productivity suites, security software, server operating systems, and relational database management systems, according to Engadget. The regulator is also examining whether Microsoft has "substantial and entrenched market power" beyond those individual markets.
What the CMA Is Actually Targeting
The CMA's complaints center on bundling: customers often treat Microsoft's products as one integrated stack, and bundled discounts make switching to rival productivity or security tools less attractive. Separately, cloud providers have told the CMA that Microsoft's licensing terms raise the cost of running Windows Server and SQL Server on non-Microsoft clouds — an issue the regulator says it is working through with Microsoft and AWS. The CMA is also looking at whether enterprise customers can freely choose AI tools and whether Copilot's rivals can compete on equal footing inside the Microsoft ecosystem.
CMA chief executive Sarah Cardell said organizations "should be able to choose the products that work best for them." Microsoft disagrees with the proposed designation, saying its products, Copilot included, are "open and interoperable." The Browser Choice Alliance and the Open Cloud Coalition, both representing Microsoft rivals, welcomed the proposal.
Microsoft isn't accused of wrongdoing, and the designation itself changes nothing on its own — it only opens the door to remedies the CMA has yet to finalize, which could take over a year to bite even if approved.
Public comments are due November 13, 2026, and the CMA must reach a final decision by February 13, 2027.