UK watchdog moves to put Microsoft’s business software under special oversight

The UK’s Competition and Markets Authority wants a much closer look at how Microsoft runs its business software empire. On October 16, 2026, the regulator proposed designating Microsoft with “strategic market status” (SMS) within its business software ecosystem. That label would let the CMA write specific rules for how the company operates, rather than relying on case-by-case enforcement after problems surface. What the CMA is proposing Think of SMS as a special category for companies the regulator considers too central to ignore. Once a firm is in it, the CMA can impose conduct requirements, which are tailored obligations on how the business behaves. The watchdog is focused on three pressure points. These are barriers that make it hard for customers to switch, bundling practices, and the competitive limits rivals face. The CMA flagged a few sectors where those issues matter most. They include cloud licensing, AI productivity tools and security software. The proposal rests on provisional findings. According to the CMA, those findings indicate Microsoft holds a dominant position across five key digital activities, including operating systems and productivity software. The regulator ...