The UK’s competition watchdog is launching a new probe into Microsoft’s business software ecosystem as it sets its eyes on the cloud market.

The Competition and Markets Authority Board has looked at several closely connected issues across cloud services and business software, with the aim of ensuring customers (including businesses and government) can benefit from the best available products at the most competitive prices, while also supporting greater choice to strengthen the resilience of the UK’s digital economy.

Starting in May, the CMA will begin a strategic market status investigate Microsoft’s business software ecosystem. As Microsoft is deemed to have strategic market status (SMS) – as it supplies hundreds of thousands of UK businesses with software and cloud capabilities – the CMA will be able to act on major concerns from its cloud market investigation.

These include Microsoft’s use of software licensing reducing competition in cloud; the SMS designation would also open the door for ensuring further investigations and rules to bolster fairer competition in the sector.

The CMA also said that Microsoft and Amazon have already set out actions on cloud egress fees and interoperability to support greater choice for businesses and public sector organisations in the UK. These changes aim to reduce expense and effort for UK customers when using more than one cloud provider.

The CMA has also made clear further steps are required to help UK customers multi-home and switch, with ongoing dialogue to take place around these areas.

Since the CMA’s investigation into the cloud ecosystem closed in July 2025, the regulator has heard wider concerns regarding Microsoft’s position in business software, particularly productivity software, operating systems, database management, and related security services.

The CMA intends for the UK to benefit from emerging technology, which can be accomplished if there are a broad range of competitors that can integrate with Microsoft’s business software.

Recommended reading

• 85% of SMBs Rely On the Cloud, Only 14% Trust It
  
• UK Cloud Firms Push CMA to Act Fast on Microsoft and AWS
• Runaway Cloud Spend is Squeezing Margins, Warn 89% of CFOs
• Sovereign Cloud Infrastructure Spend to Reach $80BN in 2026

“We’re using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers. This announcement shows we’re not just responding to today’s concerns but getting ahead of emerging issues too,” Sarah Cardell, chief executive of the CMA said.

“Cloud remains central to our approach – we’ve seen real progress through our engagement with Microsoft and Amazon to drive meaningful improvements on egress fees and interoperability and we expect more action from them over the coming months.

“At the same time, we’re taking action now, deciding to launch an investigation into Microsoft’s business software ecosystem. An SMS designation would enable us to tackle remaining concerns around Microsoft’s licensing practices in cloud and would also enable us to ensure a level playing field as AI is rapidly embedded into everyday business software tools.

“Through this package of actions, we’re driving changes across cloud and business software to make sure these markets are competitive and resilient for UK businesses and the public sector.