Microsoft set to face another major UK probe - this time over cloud and software licensing, and if it should get ‘strategic market status’

• CMA launches Strategic Market Status investigation into Microsoft software, could take nine months
• UK regulators are worried that the company is bundling its software together for an unfair advantage
• Microsoft has already reached an agreement with the CMA over cloud interoperability

Britain's Competition and Markets Authority (CMA) has announced it will begin a Strategic Market Status (SMS) investigation into Microsoft's software in May 2026, likely covering the Windows operating system, Office productivity software and Copilot AI assistant.

It's Copilot more than the others that's likely prompted this action, with the CMA looking to ensure a level playing field by preventing Microsoft from gaining an unfair advantage.

As ever, the CMA is focusing on interoperability here, looking for a solution to let customers mix and match AI and productivity tools across multiple providers.

Microsoft faces another antimonopoly investigation

On the cloud front, Microsoft has already promised to improve interoperability and remove cloud egress fees to make it easier for UK customers to switch or use multi-cloud setups, but now the CMA is honing in on the company's productivity software.

"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," Chief Executive Sarah Cardell wrote.

Mark Boost, CEO of UK-based cloud provider Civo, praised the probe's intentions but criticized it for "not provid[ing] adequate solutions to solve the serious issues surrounding the dominance of these key foreign-based hyperscalers."

The CMA's Cardell envisions a process whereby the body can deliver fast and proportionate impact across the cloud and software markets to save customers money in real-time, but with the SMS likely to take up to nine months, we're unlikely to see any immediate impact.

Microsoft says it's already abolished egress fees globally for customers switching providers, offering them a free switching window of 180 days (up from 60) as well as free data transfers.

Company President Brad Smith also explained that Microsoft agrees with the principles of moving workloads freely, running across multiple clouds and preventing vendor lock-in.

"We are committed to working quickly and constructively to address these issues, including by providing all the information the CMA needs to move forward with its reviews," Smith shared.

Smith also drew attention to Google – a company that's already submitted complaints about Microsoft and Amazon's dominance. Google Cloud's revenue grew 48% last quarter (compared with 18% overall company revenue growth), while AWS and Microsoft Cloud's revenue grew by a far smaller 24-26% in the same quarter.

Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button!

And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form, and get regular updates from us on WhatsApp too.