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Microsoft hit with UK competition regulator probe over software business

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Why This Matters

The UK competition regulator's investigation into Microsoft's enterprise software ecosystem highlights ongoing concerns about market dominance and licensing practices in the tech industry. This scrutiny underscores the increasing focus on digital sovereignty and fair competition as governments seek to diversify technology stacks and regulate AI integration. For consumers and businesses, this could lead to more balanced market dynamics and potentially more choices in enterprise software solutions.

Key Takeaways

Microsoft has been hit with a fresh probe into its business software ecosystem by the British competition regulator, as Europe steps up its efforts to diversify tech stacks and increase digital sovereignty.

The U.K.'s Competition and Markets Authority announced on Tuesday it is launching a "strategic market status (SMS) investigation" into the tech giant's suite of enterprise software, starting in May.

Hundreds of thousands of U.K. businesses and public sector organisations use Microsoft's business software, which includes Windows, Word, Excel, Teams and AI platform Copilot, every day, the regulator said in a statement.

"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 is rapidly embedded into everyday business software tools," CMA CEO Sarah Cardell said in a statement.

Microsoft is committed to working "quickly and constructively" to address the issues identified by the CMA, said the company's president, Brad Smith.

"We recognize that the CMA will continue to review and assess additional issues relating to our products and services, including in the business software market," Smith added in a statement.

Google and Apple were designated with SMS by the CMA in October with regard to their mobile platforms. The status is not a finding of wrongdoing, but it means that the companies must adhere to rules designed to prevent abuse of dominant positions.