UK watchdog proposes tougher scrutiny of Microsoft software

[LONDON] Microsoft’s grip on business software is making it harder for customers to switch providers, the UK’s antitrust watchdog said, as it proposed tougher oversight of the tech giant.

The Competition and Markets Authority (CMA) said it will decide by February whether to designate the company with strategic market status, which would give it powers to intervene in areas including cloud licensing, artificial intelligence productivity tools and security software.

“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,” the watchdog said on Friday (Oct 16).

The decision adds to mounting regulatory challenges facing Microsoft in the UK, three years after its ugly regulatory showdown with the CMA over the US$69 billion takeover of games publisher Activision Blizzard.

The CMA is separately investigating whether Microsoft misled customers into paying more for its software subscriptions after adding its Copilot AI product to the package.

Microsoft does “not share the CMA’s views in its proposed decision on business software solutions”, the company said.

“All our products – including Copilot – are open and interoperable, giving customers the ability to use them alongside competing services.”

The CMA launched the investigation earlier in 2026 following concerns about Microsoft’s dominant position in business software, including productivity software, operating systems and database management.

The business software includes Word, Outlook and Copilot, and has around 20 million monthly UK users, said the CMA.

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It is examining whether “the way Microsoft bundles and integrates its security products limits customer choice”.

The watchdog will probe further for possible interventions on software bundling and allowing greater choice for customers, including on rival AI providers to Microsoft’s Copilot. BLOOMBERG