IT News on October 17th: According to a report by Reuters on October 16th, the UK Competition and Markets Authority plans to designate Microsoft as having a "strategic market position" in the commercial software market. This move may grant regulatory authorities the power to intervene in Microsoft's practice of bundling products such as Excel, Teams, AI, and the Copilot assistant.
In May this year, the UK Competition and Markets Authority began to investigate whether Microsoft's dominance in the commercial software market hindered competition.
It is reported that Microsoft's commercial software has approximately 20 million users in the UK each month.
Regulators pointed out on that day that Microsoft holds a strong position in the PC operating system, as well as in the markets for office software, security software, server management, and database management software. Customers face numerous obstacles when switching to products from other suppliers, which further consolidates Microsoft's market advantage.
A Microsoft spokesperson disagrees with this conclusion: "All of our products, including Copilot, feature an open design that allows for interoperability with other services. Customers can use both Microsoft products and those of our competitors simultaneously."
The UK Competition and Markets Authority will next investigate whether customers have the freedom to choose AI tools, as well as whether other manufacturers can compete with Copilot.
According to IT, regulatory authorities will also examine whether Microsoft's practice of bundling security software with other products restricts customer choices, as well as how the software licensing method affects customers' decisions when selecting cloud services.
Sarah Caddell from the UK Competition and Markets Authority CEO stated that workplaces across the UK, from small businesses to important public service institutions, rely on commercial software and cloud services. "Enterprises and institutions should be able to choose the products that best suit them, switch suppliers when necessary, and also use services from different suppliers simultaneously. We want to ensure that businesses have the freedom to decide how to combine Microsoft products with other products."
The UK Competition and Markets Authority will seek opinions from all parties regarding this proposal and make a final decision by February 2027.
If the proposal is approved, Microsoft will become the third company to be subject to the new regulatory regime in the UK digital market. Previously, Google was deemed to have a strategic market position due to its online search business; in October 2025, both Google and Apple's mobile platforms were also given the same designation.
Regulators also pointed out that Microsoft and Amazon Web Services ( AWS ) still need to further remove the obstacles that customers face when switching cloud service providers or using multiple cloud service providers simultaneously.
Two companies have taken some measures to increase customers' choices, which include promoting interconnection between their respective data centers with competitors and waiving data transfer fees for customers when switching cloud service providers. In this regard, regulatory authorities believe that there is still room for improvement.
The UK Competition and Markets Authority will continue to work with both companies, while assessing whether it is necessary to initiate a formal investigation into the cloud services industry.
A Microsoft spokesperson said, "We welcome the UK Competition and Markets Authority's recognition that Microsoft's position in the cloud services market is not sufficient to justify its designation as having a strategic market position under the digital market competition regulations."
AWS also welcomed the latest progress announced by regulatory authorities: 'In 2026, we will continue to invest in developing new features for AI, multi-cloud services, and open standards, giving customers more autonomy in building and operating their systems.'
