UK regulators propose enhanced oversight of Microsoft, citing potential anti-competitive advantages from bundled software and limited third-party access.
CMA investigates Microsoft's software bundling
The UK Competition and Markets Authority (CMA) has concluded that Microsoft's integration of professional software may give it unfair advantages, after a five-month investigation. The authority is considering measures that could affect products like Copilot, Defender, and Microsoft's commercial offerings.CMA proposes enhanced monitoring
The CMA is considering placing Microsoft under an enhanced monitoring regime, believing that the technical and commercial links between its products make it harder for competitors to be used. If finalized, Microsoft may be required to open its software more to third-party developers and change some bundled offers, especially those involving Copilot and Defender.Microsoft's market dominance examined
The CMA looked into how Microsoft uses its strong position across various markets, including operating systems, office suites, and cybersecurity software. Businesses that use multiple Microsoft products can manage them more easily from a single environment, which gives them a practical advantage.Costs of switching to competitors
The more a company uses Microsoft products, the more expensive it can be to switch to another supplier. Replacing one product could mean losing discounts on all licenses, while the features included in Microsoft subscriptions make competing products less appealing. Defender, for example, is often included in Microsoft 365, which can discourage the use of other cybersecurity providers.Technical barriers for competitors
Some competitors have raised concerns about limited access to data, APIs, or internal functions of Microsoft software, which makes it harder for them to integrate their own products. This could also benefit Copilot, which is directly integrated into Microsoft 365 applications, giving it an edge in the AI market.CMA aims for fairer access
The CMA is considering requiring Microsoft to provide more equitable access to data and functions for both cybersecurity publishers and AI assistant providers. It might also allow users to choose a different default assistant, sell some Copilot features separately, and revise the licensing conditions of Windows Server and SQL Server.Microsoft's past commitments in Europe
Microsoft has already made changes in Europe, where in September 2025 it agreed to sell Office 365 and Microsoft 365 without Teams at lower prices and improve compatibility with competing services. However, these changes have not significantly changed business practices, as many organizations still prefer the integration with Microsoft products.UK could impose stricter rules
The UK authorities may now take stronger action than just separating licenses, targeting the technical and commercial factors that create dependency on Microsoft. To do this, the CMA proposes granting Microsoft the Strategic Market Status (SMS), a designation under UK digital markets law that would allow specific obligations to be imposed later, after new procedures.Public consultation and final decision
The public consultation on the CMA’s proposal is open until November 13, with a final decision expected by February 13, 2027 at the latest. The SMS designation would not be a formal condemnation but would allow the CMA to impose targeted obligations in the future.
