UK regulator proposes strategic market status for Microsoft

The Competition and Markets Authority proposed designating Microsoft with strategic market status in its business software ecosystem on 16 October 2026. The UK competition regulator announced the proposal following an assessment of how the technology company's commercial practices and software bundling affect businesses and public sector organisations.

Microsoft's business software suite—which includes Word, Excel, Outlook, PowerPoint, Teams, and Copilot, alongside security, server, and operating system products—is used by over one million UK businesses and public sector bodies, reaching around 20 million monthly users. The regulator stated that these software products support critical workplace functions where competition is required to maintain customer choice and productivity.

The proposed designation follows findings across five digital activity sectors: personal computer operating systems, productivity software suites, security software, server operating systems, and relational database management systems. The regulator found that Microsoft holds a strong position in all five sectors. It noted that customers face barriers when attempting to switch, which limits their options and weakens competitive pressure from rival software developers.

The authority highlighted that commercial practices and integration advantages encourage customers to adopt Microsoft products, creating barriers that competing developers struggle to overcome. It noted that government bodies and critical organisations need the ability to choose, switch, and combine digital services without depending heavily on a single technology provider.

Along with the proposed decision, the regulator published an indicative roadmap setting out areas for potential future regulatory intervention. Key areas under consideration include reviewing how Microsoft bundles its software tools and ensuring third-party developers can more easily integrate their applications into Microsoft's business software ecosystem.

Microsoft stated that it disagrees with the proposed designation. The company asserted that its software products remain interoperable with third-party software.

The regulator is accepting public feedback on the proposed designation until 13 November 2026, before making its final decision.