Microsoft has been hit with a fresh probe into its business software ecosystem by the British competition regulator, as Europe steps up its efforts to diversify tech stacks and increase digital sovereignty.
The U.K.’s Competition and Markets Authority announced on Tuesday it is launching a “strategic market status (SMS) investigation” into the tech giant’s suite of enterprise software, starting in May.
Hundreds of thousands of U.K. businesses and public sector organisations use Microsoft’s business software, which includes Windows, Word, Excel, Teams and AI platform Copilot, every day, the regulator said in a statement.
“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,” CMA CEO Sarah Cardell said in a statement.
Microsoft is committed to working “quickly and constructively” to address the issues identified by the CMA, said the company’s president, Brad Smith.
“We recognize that the CMA will continue to review and assess additional issues relating to our products and services, including in the business software market,” Smith added in a statement.
Google and Apple were designated with SMS by the CMA in October with regard to their mobile platforms. The status is not a finding of wrongdoing, but it means that the companies must adhere to rules designed to prevent abuse of dominant positions.
Addressing CMA concerns
In July, the CMA released the findings of its cloud services market investigation, which said that market concentration and barriers to entry in the cloud services market have enabled both Microsoft and Amazon to hold “significant unilateral market power.”
The report found that Microsoft and AWS each had a 30-40% share of the infrastructure-as-a-service (IaaS) market — which includes processing, storage, networking and other raw computing.
Following engagement with the CMA, Microsoft and Amazon have set out actions on cloud egress fees (charges related to switching providers) and interoperability, the regulator said.
Amazon said in a statement it was formalising its “commitment to customer choice through clear, comprehensive rights around multicloud adoption, data portability, and switching processes.”
“We have also agreed to continued, structured engagement with the CMA as we support their efforts to ensure the cloud continues to power the UK’s thriving innovation economy for years to come,” it added.
“The changes address the CMA’s commitment to ensuring that UK customers can continue to move, deploy, and operate their workloads in the clouds of their choice with confidence, flexibility, and ever reduced friction,” Microsoft’s Smith said.
There’s been growing scrutiny on the reliance of Europe’s business and governments on U.S. tech systems as geopolitical tensions have risen in recent times, with European capitals accelerating moves to diversify tech stacks.
