UK Regulator Reopens Probe Into Microsoft Over Cloud Licensing Practices

Britain's Competition and Markets Authority (CMA) has relaunched its investigation into Microsoft, zeroing in on the company's cloud software licensing practices. The probe revisits concerns previously set aside, now with a sharper focus on whether Microsoft should be designated as having "strategic market status" in business software—a move that would grant the CMA expanded powers to regulate its conduct. Central to the scrutiny is Microsoft's bundling of major enterprise tools like Windows Server and Microsoft 365 with its Azure cloud platform. The CMA argues this setup forces businesses into extra costs when trying to use rival cloud services, making it harder to switch providers or manage multi-cloud operations. This, the regulator says, undermines competition and inflates expenses for UK firms.

The UK cloud market is dominated by Amazon's AWS and Microsoft, each holding between 30% and 40%, while Google accounts for 5% to 10%. The CMA previously flagged this concentration as risky for innovation and pricing. Though Microsoft and Amazon have made some concessions—such as lowering data egress fees and boosting interoperability—the CMA believes deeper reforms are necessary. CMA Chief Executive Sarah Cardell described the approach as "flexible, pragmatic" but firm in protecting customer interests. Microsoft's Brad Smith defended recent changes, saying they give customers more freedom to "move, deploy, and operate their workloads." Amazon echoed support for open cloud choices.