UK Watchdog Proposes Strategic Market Status for Microsoft Over Software Grip

The UK’s Competition and Markets Authority (CMA) proposed tougher oversight of Microsoft Corp. on Friday, stating that the company's position in business software creates barriers for customers attempting to switch providers. The watchdog will decide by February whether to formally designate Microsoft with "strategic market status," a classification that would grant the regulator intervention powers across cloud licensing, AI productivity tools, and security software. According to the CMA, Microsoft's business software suite—which includes Word, Outlook, and its Copilot AI assistant—reaches around 20M monthly users in the UK, alongside its operating systems and database management offerings. Regulators are examining whether Microsoft's bundling of security products restricts customer choice and will evaluate potential remedies to open its software to rival AI providers competing with Copilot. The proposal adds to ongoing UK regulatory scrutiny following the CMA's battle over Microsoft's $69B takeover of Activision Blizzard Inc. three years ago, as well as a separate active probe into whether Microsoft misled customers into paying higher subscription fees after adding Copilot to its packages. "Microsoft’s strength in business software comes from the barriers customers face when switching, limiting their choice and weakening the constraints of other software developers." — UK Competition and Markets Authority. "All our products - including Copilot - are open and interoperable, giving customers the ability to use them alongside competing services." — Microsoft Corp.