Britain's competition watchdog found in July 2025 that Microsoft's cloud licensing harms UK businesses. Fifteen months on, its own update admits nothing has changed and promises only more evidence-gathering.
Estimated reading time: 9 minutes
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In short. On 16 October 2026 the Competition and Markets Authority proposed to designate Microsoft with Strategic Market Status (SMS) in its Business Software Ecosystem, the gateway to the UK's Digital Markets Competition Regime [[1]]. The accompanying roadmap records that the CMA's own Cloud Market Investigation concluded in July 2025 that "Microsoft's licensing practices in relation to certain business software limit customer choice and reduce competition in cloud services" (page 5) [[2]], and that "the evidence we have received since the Cloud MI shows that Microsoft has not altered its licensing practices in respect of that software" (page 5) [[2]]. The next step the roadmap proposes is not a fix: it is to "carry out further work on whether and how to address these concerns" (page 5) [[2]]. Separately, the roadmap records that the European Commission already extracted binding unbundling and interoperability commitments from Microsoft over Teams in 2025, and that "these commitments do not currently apply formally in the UK" (page 6) [[2]]; the CMA's own next step there is only to "consider the case for possible action" (page 6) [[2]]. Two documented mistakes: four stars.
Microsoft's business software has become, in the CMA's own words, "central to the operation of more than a million UK organisations in all sectors and sizes, which together spent more than $7 billion in 2025 on Microsoft products" (page 7) [[1]]. Microsoft Limited, the UK marketing and distribution entity, reported turnover of £10.9 billion for the year to 30 June 2025 (page 25) [[1]]. This is the CMA's fourth Strategic Market Status investigation; it designated Google in general search and Apple and Google in mobile platforms during 2025 (page 12, footnote 1) [[1]]. It must conclude by its statutory deadline of 13 February 2027 (page 12) [[1]]. The investigation's case page lists both documents among the material published on 16 October 2026 [[3]]. The proposed decision itself runs to 179 pages and provisionally finds Microsoft holds "substantial and entrenched market power" across five product areas, with a UK revenue share in productivity software of [70-80]% and a return on capital employed "over 70% for the last nine years" (pages 109 and 118) [[1]]. None of that is in dispute here. What this piece tests is the 27-page roadmap published alongside it, and what the CMA's own words say about what happens to a harm it has already proven.
A harm the regulator proved, and says is still there
The CMA does not need to establish that Microsoft's cloud licensing hurts competition. It already did that. In July 2025, "a CMA inquiry group's Cloud Market Investigation Final Decision Report (Cloud MI) concluded that Microsoft's licensing practices in relation to certain business software limit customer choice and reduce competition in cloud services" (page 5) [[2]]. The roadmap goes on, in the same paragraph, to report its own follow-up: "the evidence we have received since the Cloud MI shows that Microsoft has not altered its licensing practices in respect of that software" (page 5) [[2]].
The roadmap's own Table 1 sets out what "has not altered" means in practice (page 19) [[2]]. Customers who bought Windows Server or SQL Server licences before October 2019 must run them on dedicated hardware to use a rival cloud provider; customers cannot bring Microsoft 365 or Windows 10/11 licences bought after that date to a non-Azure "Listed Provider" at all without facing additional fees, reduced functionality or dedicated-hardware requirements; and Listed Providers are barred from reselling Windows Server, SQL Server, Microsoft 365 or Windows 10/11 licences through their own agreements with Microsoft (page 19) [[2]]. These are not allegations under investigation. They are the same practices the Cloud MI already found anticompetitive, still in force 15 months after that finding, confirmed directly against Microsoft by the CMA's own fresh evidence-gathering.
Given a proven harm and a confirmation that it persists, the roadmap's next step is "to carry out further work on whether and how to address these concerns under the framework of the Digital Markets, Competition and Consumers Act 2024 (the Act), should Microsoft have SMS in respect of its Business Software Ecosystem" (page 5) [[2]]. That sentence has three conditions stacked on it before anything changes for a customer: further work to decide whether to act, a final SMS designation that will not arrive before 13 February 2027, and then, only if a Conduct Requirement is proposed, a separate statutory consultation before it can be imposed (page 10) [[1]]. The roadmap is explicit that this is not a side effect of the process but how it is designed to work: "any potential CRs or PCIs will be subject to assessment and public consultation, in accordance with the processes and legal framework set out in the Act" (page 10) [[1]].
Brussels already has a fix. London's roadmap offers a maybe
The gap is sharper on a second practice the roadmap documents. The European Commission investigated a complaint "that Microsoft was leveraging its strong position in productivity software to distort competition for C&C applications, through bundling of Teams within wider productivity suites and offering insufficient interoperability and integration with rivals." To resolve it, "the EC accepted a package of commitments combining unbundling, interoperability and transparency measures in 2025," which require Microsoft to sell Microsoft 365 without Teams, maintain a genuine price gap between the bundled and unbundled versions, and provide interoperability and data portability for switching customers (pages 6 and 24) [[2]]. The CMA's own roadmap records the result for UK customers in one sentence: "these commitments do not currently apply formally in the UK" (page 6) [[2]].
The roadmap's response to that gap is not to extend the EU fix to UK customers. It is to keep looking: "as part of our further evidence gathering, we will consider the case for possible action in the UK, taking into account the operation of the commitments in the EEA and any evidence of barriers to competition in the UK" (pages 6 and 25) [[2]]. "Consider the case for possible action" commits the CMA to nothing beyond more analysis, on a complaint a different regulator has already settled with enforceable terms. A UK business negotiating a Microsoft 365 licence today has no binding right to buy it without Teams; a comparable business in Dublin or Berlin does.
Credit where due
The CMA is not hiding any of this. Both admissions, that Microsoft has not changed its cloud licensing since a proven finding of harm, and that EU customers have a protection UK customers do not, are printed in the roadmap's own words rather than left for a reader to infer from an annex. The 179-page proposed decision is unusually transparent about its own evidence base: named percentage ranges for market share and profitability, a commissioned customer research study (Jigsaw Customer Research, 28 September 2026) cited by page and paragraph throughout, and a published invitation to comment that drew 33 responses before any provisional conclusion was reached (page 12) [[1]]. The roadmap also keeps a formal consultation window open, with written views due by 17:00 UK time on 13 November 2026 and a stated commitment to publish non-confidential responses (page 27) [[2]]. This is a regulator doing the analytical work in public, not asserting an outcome and hiding the reasoning behind it.
The claims, tested
| The document's own words | What the record shows | Verdict |
|---|---|---|
| The Cloud MI (July 2025) found Microsoft's licensing "limit customer choice and reduce competition in cloud services" (page 5) [[2]] | The same page reports fresh evidence that "Microsoft has not altered its licensing practices in respect of that software," and Table 1 lists the specific restrictions still in force (pages 5 and 19) [[2]] | A harm the CMA already proved is confirmed ongoing, and the roadmap's fix is to "carry out further work on whether and how to address" it, not to address it |
| The EC "accepted a package of commitments" unbundling Teams and requiring interoperability in 2025 (page 6) [[2]] | The roadmap states plainly that "these commitments do not currently apply formally in the UK," with the CMA's own next step only to "consider the case for possible action" (pages 6 and 25) [[2]] | UK customers have no binding equivalent to a fix EU customers already have, and none is promised, only reviewed |
Verdict
Four stars, from two documented mistakes, neither of them hidden. The CMA's own roadmap proves a harm, confirms it is unaddressed, and then proposes to spend more time deciding whether to address it; and it records that EU customers already have a binding fix for a related practice that UK customers do not, with no commitment to close that gap, only to look at it. A UK business renegotiating its Microsoft Enterprise Agreement this winter is doing so under exactly the licensing terms the CMA found anticompetitive 15 months ago, with no date by which that will change.
The star score counts two documented mistakes: the roadmap confirms that Microsoft's cloud licensing practices, found anticompetitive by the CMA's own Cloud Market Investigation in July 2025, remain unchanged as of this roadmap's fresh evidence-gathering, and its proposed next step is "further work on whether and how to address" them rather than action, with any eventual Conduct Requirement still subject to a separate statutory consultation before it could be imposed; and the roadmap records that European Commission commitments already give EU customers a binding, enforceable fix to a related Microsoft Teams bundling complaint that "do not currently apply formally in the UK," with the CMA's own next step limited to considering whether UK action is warranted. Two falls in the 1 to 3 band: four stars; the bands are on the ratings page. This piece makes no finding that the CMA's market-power analysis is wrong, incomplete, or improperly reasoned; the 179-page proposed decision is unusually transparent about its evidence, and nothing here disputes its provisional conclusion that Microsoft holds substantial and entrenched market power. The finding is narrower: a proven, confirmed-ongoing harm and an EU/UK enforcement gap are both documented in the regulator's own words, and the roadmap's own next steps for both are further evidence-gathering, not a remedy with a date attached. Checked directly against the CMA's Proposed Decision on SMS in respect of Microsoft's Business Software Ecosystem and its Indicative Roadmap for promoting competition in relation to business software (both full text, both published 16 October 2026), and the CMA's case page for the investigation (all fetched 17 October 2026).
Sources
- Strategic Market Status investigation into Microsoft's Business Software: Proposed Decision, Competition and Markets Authority, 16 October 2026
- Strategic Market Status investigation into Microsoft's Business Software Ecosystem: Indicative roadmap for promoting competition in relation to business software, Competition and Markets Authority, 16 October 2026
- Microsoft's business software ecosystem, Competition and Markets Authority, case page