Microsoft business software faces UK competition probe

Britain’s competition watchdog announced plans on Tuesday to launch an investigation into Microsoft’s business software systems, under new measures targeting the dominance of technology giants.

The Competition and Markets Authority said the probe would assess whether the U.S. tech company should be handed “strategic market status” (SMS), subjecting it to special requirements to improve competition.

The investigation, set to begin in May, focuses on Microsoft’s business tools, including Windows, Word, Excel, Teams and Copilot, which are used by hundreds of thousands of UK businesses and organisations.

The CMA said it could lead to action over concerns that Microsoft’s software licensing practices may reduce competition in cloud computing.

Simultaneously, the regulator said that Microsoft and Amazon Web Services have taken action to lower fees and make it easier to switch providers in the cloud service market.

This follows a prior CMA investigation into the companies’ cloud services, which ultimately did not result in either firm being given an SMS designation.

“We’ve seen real progress through our engagement with Microsoft and Amazon… and we expect more action from them over the coming months,” said CMA chief executive Sarah Cardell.

The CMA said the new investigation into Microsoft would help address “remaining concerns” around its licensing practices, while also ensuring a “level playing field as AI is rapidly embedded into everyday business software tools.”

Microsoft president Brad Smith said in a statement that “cloud and AI markets continue to change at an unprecedented pace.”

“We are committed to working quickly and constructively to address these issues, including by providing all the information the CMA needs,” he added.

The watchdog has already used the new regulations to tackle Google’s dominance in online search, as well as Apple and Google’s mobile app stores.