Britain's competition watchdog will launch a formal investigation into Microsoft's business software ecosystem starting in May, potentially subjecting the tech giant to stricter oversight of its cloud licensing practices.
The Competition and Markets Authority announced Tuesday it will open a "strategic market status (SMS) investigation" targeting Microsoft's suite of enterprise software including Windows, Word, Excel, Teams and AI platform Copilot. Hundreds of thousands of UK businesses and public sector organizations use these tools daily.
An SMS designation would give regulators power to address concerns around Microsoft's licensing practices in cloud computing and ensure fair competition as artificial intelligence becomes embedded in everyday business software.
"An SMS designation would enable us to tackle remaining concerns around Microsoft's licensing practices in cloud and would also enable us to ensure a level playing field as AI is rapidly embedded into everyday business software tools," CMA CEO Sarah Cardell said.
The probe comes as both Microsoft and Amazon Web Services have offered commitments to the regulator regarding data transfer fees and interoperability in response to a separate cloud services investigation. That earlier inquiry found the dominance of both companies was harming competition in cloud computing.
Microsoft President Brad Smith said the company recognizes "the CMA will continue to review and assess additional issues relating to our products and services, including in the business software market." He committed to working "quickly and constructively" with regulators.
Strategic market status is not a finding of wrongdoing but requires companies to adhere to rules preventing abuse of dominant positions. Google and Apple received similar designations from the CMA last October regarding their mobile platforms.
"We're using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers," Cardell added about the regulatory approach.
