Microsoft faces UK probe into business software 'ecosystem'
By Frank Prenesti
Date: Tuesday 31 Mar 2026
(Sharecast News) - Microsoft is to be investigated by the UK's competition watchdog over concerns about its position in the business software ecosystem.
The Competition and Markets Authority (CMA) said it would start a strategic market status (SMS) investigation into the software giant starting in May, citing worries that its use of software licensing reduces competition in cloud services given that thousands of UK businesses and public sector organisations use its products such as Windows, Word, Excel, Teams and AI platform Copilot.
It added that the probe "would also provide a route to ensuring a level playing field among providers at a critical moment, as AI-driven innovation reshapes competition in productivity software".
The CMA added that both Microsoft and Amazon had also agreed to set out actions on a separate issue related to an earlier investigation on cloud services known as "egress fees", which are charges levied by cloud providers to move data out of their network, and interoperability to support greater choice for businesses and public sector organisations.
Sarah Cardell, chief executive of the CMA, said: "We're using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers. This announcement shows we're not just responding to today's concerns but getting ahead of emerging issues too."
"Cloud remains central to our approach - we've seen real progress through our engagement with Microsoft and Amazon to drive meaningful improvements on egress fees and interoperability and we expect more action from them over the coming months."
"At the same time, we're taking action now, deciding to launch an investigation into Microsoft's business software ecosystem. 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."
A SMS designation under the Digital Markets, Competition and Consumers Act would give the CMA powers to impose conduct requirements on companies linked to their business practices.
Reporting by Frank Prenesti for Sharecast.com
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