Britain's Watchdog Wants to Know If Anyone Can Actually Leave Microsoft

Every office worker in Britain has, at some point, tried to stop using a Microsoft product and discovered that the product had other plans. On Friday, the country’s competition regulator more or less put that experience in an official document.

The Competition and Markets Authority proposed designating Microsoft with “strategic market status” in business software, Reuters reports. That label, created under the Digital Markets, Competition and Consumers Act 2024, would let the regulator consider targeted rules for how the company runs its ecosystem. The CMA is now consulting, and Computer Weekly reports a final decision is due by February 2027.

What the CMA actually found

The investigation opened in May. The regulator now says Microsoft has a strong position across five areas: PC operating systems, productivity software, security software, server operating systems and database software such as SQL Server. Computer Weekly reports the products reach more than a million UK businesses and public bodies, with around 20 million monthly users.

The headline finding is not that Microsoft makes good software. It is that customers find it hard to switch away, or to use rival products alongside Microsoft’s, and that this limits how much pressure competitors can apply. The CMA’s proposed decision goes further and calls Microsoft’s market power “entrenched”, saying it has seen no clear evidence that cloud computing or AI will be enough to erode it within five years.

Importantly, the CMA stresses that designation is not a finding of wrongdoing. It describes market power. Any intervention would come separately.

Copilot is the real story

The regulator has set out a rough roadmap with four areas: cloud licensing, AI features in productivity software, communications tools such as Teams, and security software. The one that will get attention is AI. The CMA says it will look at whether customers can freely choose AI tools other than Copilot, and whether rivals can realistically compete with it.

This is where the timing matters. The CMA has framed the case around an AI inflection point. Its argument, per Computer Weekly, is that the market is still open but could close if Microsoft’s software does not work smoothly with rival AI providers. In plain terms: if your AI assistant is already sitting inside the spreadsheet, the email client and the meeting app, the competition starts several laps behind.

The proposed decision also notes something awkward for the optimists. Some hoped AI coding tools would make it cheap to migrate off big software suites. Customers told the CMA those tools are not yet powerful enough to overcome the barriers, and they do nothing about bundling or how procurement works.

Microsoft’s view

A Microsoft spokesperson told Reuters the company does not share the CMA’s view, saying all its products, including Copilot, are “open and interoperable” and can be used alongside competing services. CMA chief executive Sarah Cardell said organisations “should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers.”

Why it matters

For businesses, the practical questions are licensing costs, cloud choice and whether they will be able to pick an AI assistant on merit rather than by default. For Microsoft, Britain joins a long list of regulators circling the same bundle. The consultation closes in November. Until then, the most realistic way to escape the Microsoft ecosystem remains the traditional one: retire.