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CMA turns spotlight on Microsoft software ecosystem

Investigation announced to look into vendor’s licensing practices and potential impact on competition

Simon Quicke
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Published: 31 Mar 2026 15:00

The Competition and Markets Authority (CMA) has turned its attention to the software and cloud services world, with a particular focus on Microsoft and Amazon Web Services (AWS).

The organisation has announced the launch of a strategic market status (SMS) investigation into Microsoft’s business software ecosystem, as well as noting the steps made by the vendor and AWS to address interoperability and cloud egress fees for UK customers.

The CMA has been looking into the cloud services and software both enterprises and government can access to ensure both get the best technology available at competitive prices.

The Microsoft investigation will look into whether the vendor is reducing competition with its use of software licenses, covering the full gamut of applications from Windows, Word and Copilot.

There are signs that the major cloud vendors are already looking to engage with the CMA, and the organisation reported on progress made with both Microsoft and AWS to take action on fees and interoperability to make life easier and more cost-effective for those users operating multi-cloud environments.

“We’re using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers,” said Sarah Cardell, chief executive of the CMA. “This announcement shows we’re not just responding to today’s concerns, but getting ahead of emerging issues, too. Cloud remains central to our approach – 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.

“At the same time, we’re taking action now, deciding to launch an investigation into Microsoft’s business software ecosystem,” she added. “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 [artificial intelligence] is rapidly embedded into everyday business software tools. Through this package of actions, we’re driving changes across cloud and business software to make sure these markets are competitive and resilient for UK businesses and the public sector.”

Steps outlined

Brad Smith, vice-chair and president at Microsoft, issued a statement addressing the CMA announcement, outlining steps it was taking in response to the Cloud market investigation report announced last July.

As a result, UK Azure customers would find it easier to move workloads across the cloud, with the vendor making changes to focus on data egress, switching and interoperability.

“We will implement all these changes promptly,” he said. “We will also proactively share information about these changes with other regulators around the world.

“We recognise that the CMA will continue to review and assess additional issues relating to our products and services, including in the business software market. 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 pointed out that the cloud market was evolving at pace, and a competitive environment with numerous rival players including AWS, Google, Oracle and other entrants.

“Especially in times of such dynamic change, a thorough regulatory review requires rapid access to real-world market data and customer input,” he said. “This is the only way regulators can act in a targeted and agile manner that brings faster changes to the market while fostering continued innovation and investment. This type of work always requires dialogue on both sides. We appreciate the opportunity we have had for direct and constructive conversations with the CMA and its staff, and look forward to an ongoing dialogue in relation to relevant cloud issues in the future.”

The CMA indicated it would outline the full scope and purpose of its investigation next month, but would be keeping a focus on the area of software and cloud services and review progress in six months’ time.

AWS was contacted for comment.

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