UK CMA proposes strategic market status for Microsoft's business software
In brief
- UK CMA proposed strategic market status for Microsoft's business software ecosystem on October 16, 2026.
- Microsoft is dominant across five digital activities, according to the CMA's provisional findings.
- Switching barriers, bundling and competitive limits facing rivals are the central concerns.
- SMS status wouldn't imply wrongdoing by Microsoft, the CMA says.
- Consultation closes November 13, 2026; a final decision is expected by February 13, 2027.
What the CMA says it found
According to the CMA, provisional findings indicate Microsoft holds a dominant position across five key digital activities, including operating systems and productivity software. The regulator says that view is backed by customer research and market analysis.
Three issues drove the case. The CMA pointed to barriers that make it hard for customers to switch, bundling practices and the competitive limits rivals face (it flagged cloud licensing, AI productivity tools and security software as the areas where those issues matter most). Its worry is that switching barriers and the integration advantages of Microsoft's products may reduce customer choice and dampen competition; the CMA said those concerns are heightened as AI reshapes productivity tools.
The footprint isn't small. Citing the CMA, Crypto Briefing reported that Word, Excel, Outlook and Teams serve over one million UK organisations, adding up to roughly 20 million monthly users.
What SMS status would mean
Once a firm has SMS, the CMA can impose conduct requirements (tailored obligations on how the business behaves). The regulator has framed the designation as a tool for introducing those requirements to boost competition, and it says SMS status wouldn't imply wrongdoing by Microsoft.
It's a proposal, and the CMA hasn't ruled yet.
The evidence will be tested during consultation. In its own analysis, Crypto Briefing wrote that the CMA's research findings suggest Microsoft may need to adopt more transparent practices if the designation goes through. That's the outlet's reading, though, not a requirement the regulator has set.
The timeline from here
The CMA launched the investigation in May 2026, building on prior reviews carried out in 2025. It's the fourth SMS investigation under the UK's digital markets framework, according to the CMA as reported by Crypto Briefing.
Consultation on the proposed designation closes November 13, 2026. After that, the CMA is expected to make a final decision by February 13, 2027, so Microsoft and its business customers in the UK won't know the final shape of any conduct rules until then.
Frequently asked questions
What is strategic market status under the UK's digital markets framework?
Strategic market status (SMS) is a label that lets the CMA write specific rules for how a company operates, rather than relying on case-by-case enforcement after problems surface. Once a firm has SMS, the CMA can impose conduct requirements, which are tailored obligations on how the business behaves.
Does the CMA's proposal mean Microsoft did something wrong?
No. According to the CMA, as reported by Crypto Briefing, an SMS designation would not imply wrongdoing by Microsoft. The regulator framed it as a tool to introduce conduct requirements aimed at boosting competition, and the proposal is still being tested during consultation.
When will the CMA make a final decision on Microsoft's SMS designation?
The consultation on the proposed designation runs until November 13, 2026. After that, the CMA is expected to make a final decision by February 13, 2027.
