The UK's Competition and Markets Authority proposed on October 16 to designate Microsoft with strategic market status (SMS) across its business software ecosystem, under the Digital Markets, Competition and Consumers Act 2024. The proposal spans five activities — operating systems, productivity software, security software, server operating systems and database software — reaching more than a million UK businesses and public bodies and roughly 20 million monthly users.

SMS is not a finding of wrongdoing, but it would give the CMA power to impose tailored conduct requirements later. Its indicative roadmap names four areas for further evidence: cloud licensing, AI features in productivity software — including whether customers can freely choose AI tools beyond Copilot — communications software such as Teams, and security software bundling. The CMA provisionally points to strong positions in each area, plus switching barriers and bundling advantages rivals struggle to overcome.

A consultation runs until November 13, with a final decision due by February 2027. Microsoft says all its products, including Copilot, are open and interoperable and can be used alongside competing services.