The UK’s Competition and Markets Authority (CMA) will begin a strategic market status investigation into Microsoft this month, focusing on potential uncompetitive practices related to the bundling of its software products, including Windows, Word, Excel, Teams, Copilot, and other Office applications.
CMA Chief Executive Sarah Cardell stated, “Our aim is to understand how these markets are developing, Microsoft’s position within them and to consider what, if any, targeted action may be needed to ensure UK organizations can benefit from choice, innovation and competitive prices.” The investigation will also examine Microsoft’s cloud licensing practices, emphasizing its relevance as hundreds of thousands of UK residents utilize Microsoft business software.
The CMA plans to conclude the review by February, at which point Microsoft may receive a strategic market designation. Microsoft has indicated it is “committed to working quickly and constructively with the CMA” during this investigation. A strategic market label does not imply wrongdoing; however, it empowers the CMA with greater flexibility for future interventions.
This investigation is not the first for Microsoft by the CMA. In 2023, the CMA initiated an inquiry into the company’s relationship with OpenAI, and a subsequent investigation in 2024 addressed Microsoft’s recruitment of staff from the AI firm Inflection to circumvent merger scrutiny. Additionally, Microsoft is currently facing legal challenges in the United States, where the FTC has launched investigations related to its investments in OpenAI and the Inflection recruitment strategy.
