UK CMA to Investigate Microsoft Software Licensing

The UK's Competition and Markets Authority announced on Tuesday that it will launch an investigation into Microsoft's business software ecosystem starting in May, examining whether the company's licensing practices warrant stricter regulation to promote competition.

The probe, known as a strategic market status investigation, targets Microsoft's dominant position in products such as Windows, Word, Excel, Teams and Copilot, which are used daily by hundreds of thousands of UK businesses and public sector organizations. Officials at the CMA stated that the review stems from concerns that Microsoft's software licensing may hinder competition in the cloud computing sector, particularly by making it more difficult and costly for customers to switch providers or use multiple clouds. If the investigation results in an SMS designation, the regulator could impose conduct requirements or other interventions to address these issues and ensure a level playing field, especially as artificial intelligence tools become integrated into workplace software.

This move follows the CMA's 2025 market investigation into cloud services, which concluded that the sector was not functioning effectively due...