Users may not be able to combine Microsoft software with competitors’ products effectively, the CMA has been told.

The UK’s competition watchdog has launched an investigation into Microsoft’s enterprise software ecosystem over interoperability concerns.

The Competition and Markets Authority (CMA) probe will consider whether Microsoft should be given a ‘strategic market status’ (SMS) designation reserved for companies that dominate the UK market in a particular digital activity.

Apple and Google received this status last year over their dominance of mobile platforms.

The investigation will also assess whether Microsoft’s product bundling, limits in interoperability for users, and default settings prevent customers from switching to competing services. This will include probing how Microsoft’s AI competitors are able to integrate with its business software.

Hundreds of thousands of UK organisations across public and private sectors use Microsoft’s enterprise software daily, spanning the Windows operating system, Microsoft 365 suite and Copilot AI.

The CMA finds that Microsoft has more than 15m commercial UK-based users across its ecosystem, making it a key provider of productivity tools in the country.

The competition watchdog said it has received information that users may not be able to combine Microsoft software with competitors’ products effectively.

In its probe, it will examine Microsoft’s wide range of products, including productivity software, personal computer and server operating systems, database management systems and security software.

The investigation will take up to nine months to complete. The authority has invited organisations based in the UK and around the world, including rival tech companies and business software customers, to share their experiences.

This is the fourth SMS investigation opened by the CMA since the UK’s digital markets competition regime came into force in January 2025. The law gives the CMA additional powers to propose remedies and improve market competition in the country. Early last year, it opened a probe into Apple and Google over their mobile ecosystems,

The designation would also allow the CMA to potentially intervene on concerns from a separate investigation into Microsoft’s software licensing in the cloud market.

“Business software is a cornerstone of how the UK economy functions, from small businesses to major public services and infrastructure. Hundreds of thousands of customers in the UK rely on Microsoft’s systems, which is why it’s so important to ensure these services are delivering good outcomes,” said Sarah Cardell, the CMA’s CEO.

“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 organisations can benefit from choice, innovation and competitive prices.”

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