New to this? Read it in simple words
- The UK’s competition regulator says Microsoft has strong, lasting power in business software.
- It wants to give Microsoft a special status that allows it to set rules later.
- It will first check whether rival AI tools can compete fairly with Copilot.
- Microsoft disagrees, and the final decision is due by February 13, 2027.
- CMA
- The Competition and Markets Authority, the UK body that checks that markets stay fair and open.
- Strategic market status
- A UK label for a firm with strong, lasting market power. It lets the CMA set rules for it.
- Bundling
- Selling several products together, so buyers find it harder to pick a rival for one part.
A UK law from 2024 lets the CMA give “strategic market status” to tech firms with strong, lasting power in a market. Google has it for search, and Apple and Google for mobile phones, both since October 2025. Microsoft would be the third company.
What the regulator proposes
The CMA opened its investigation on May 14. On October 16, it published its proposed decision on Microsoft’s “business software ecosystem”. That covers Word, Excel, Outlook, PowerPoint, Teams and, more and more, Copilot, as well as Microsoft’s security, server and operating system products.
The CMA found Microsoft strong in five areas: PC operating systems, office software, security software, server operating systems and databases. It says barriers to switching make that position stronger.
“Organisations should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers,” said Sarah Cardell, the CMA’s chief executive.
From the CMA’s announcement, case page and roadmap of October 16. The findings are provisional.
Copilot and the AI questions
The CMA says it will first look at three things. One is whether customers can freely choose AI tools, and whether rival AI providers can compete fairly with Copilot. The others are Microsoft’s bundling of security products and its cloud licences.
A separate roadmap lists ideas for AI, to use only if more evidence shows a risk. They include giving rival AI tools the same access to Microsoft’s data and features as its own, fairer default settings and the option to sell AI features separately.
These are not decisions. The CMA says any rules would need their own consultation after a final decision.
What Microsoft says, and what comes next
Microsoft does not share the CMA’s view. It says all its products, including Copilot, are “open and interoperable”, Reuters and The Register report.
On cloud services, the CMA says Amazon Web Services and Microsoft have made switching easier, but must do more. It is keeping a full investigation of cloud services under review, with an update in spring 2027.
People and companies can comment until November 13. The CMA must make its final decision by February 13, 2027.
Sources
Every fact in this story comes from the sources below. Open them to check our work.
- 1Primary source · October 16, 2026CMA takes first steps to ensure choice in business software UK Competition and Markets Authority
- 2Primary source · October 16, 2026Microsoft’s business software ecosystem (case page) UK Competition and Markets Authority
- 3Primary source · October 16, 2026Roadmap of possible interventions UK Competition and Markets Authority
- 4Research · October 16, 2026UK competition regulator targets Microsoft’s business software grip Reuters, via The Star
- 5Research · October 16, 2026British watchdog seeks tougher terms around Microsoft’s dominance of business software The Register
- 6Research · October 16, 2026Competition watchdog mulls tightening oversight of Microsoft Sharecast News, via Hargreaves Lansdown
The findings are the CMA’s provisional view, and Microsoft disputes them. The AI measures are only ideas in the CMA’s roadmap, not decisions.
The UK regulator proposes special status that would let it set rules on Microsoft’s business software and Copilot, though nothing changes yet. How we rate the mood