UK competition regulator targets Microsoft's business software grip

Oct 16 (Reuters) - Britain's competition watchdog proposed on Friday to designate Microsoft with "strategic market status" in business software, a move that could pave the way for interventions in how the US tech major bundles products such as Excel, Teams and its Copilot AI assistant.

The Competition and Markets Authority launched in May an investigation into whether Microsoft's bundling of its business software products, which have around 20 million monthly users across the UK, was uncompetitive.

The regulator found that the company has a strong position across key areas of digital activity, including personal computer operating systems and productivity software suites, and that its strength in business software comes from the barriers customers face when switching.

A Microsoft spokesperson said it did not share the CMA's views in its proposed decision.

"All our products — including Copilot — are open and interoperable, giving customers the ability to use them alongside competing services," the spokesperson said.

The CMA is also further assessing whether customers can freely choose AI tools and whether rivals can compete with Copilot, whether the company's bundling of security products limits choice, and the impact of its licensing practices on customers' cloud deployment options.

The regulator will invite views on the proposed designation and will then make a final decision by February.

If the proposal goes through, it would make Microsoft the third company subject to Britain's new digital market powers. Google received strategic market status in online search and in mobile platforms, and Apple received strategic market status in mobile platforms, all in October 2025.

In June this year, the CMA imposed new conduct requirements on Google's search services, including allowing publishers to stop their content being used to power the US tech major's AI features.

It also ordered Google to provide greater transparency on how its search rankings work.

(Reporting by Yadarisa Shabong in Bengaluru and Paul Sandle in London; Editing by Jochelle Mendonca and Janane Venkatraman)