The UK competition regulator is to open a probe into Microsoft’s suite of enterprise software, beginning in May, that will determine whether the company can be designated as having strategic market status (SMS) in the sector – this opening the way for targeted action under new legal powers.
The probe has specific relevance to Microsoft’s licensing practices in its cloud business, which the Competition and Markets Authority (CMA) found last July to be negatively affecting competition.
The CMA said at the time took issue with Microsoft’s cloud licensing practices, under which it charges customers more for using its software, such as Windows Server and Microsoft 365, on other companies’ cloud platforms.
‘Unilateral market power’
Microsoft’s Windows, Word, Excel, Teams and Copilot are used by hundreds of thousands of UK businesses and public-sector organisations, the CMA said.
“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,” said CMA chief executive Sarah Cardell.
The July findings found that Microsoft and Amazon each held 30 to 40 percent of the cloud infrastructure market, a position that gave them “significant unilateral market power”.
Cloud competition
Both companies have engaged with the CMA to take certain actions on fees for switching providers and on interoperability issues, the CMA said.
Google and Apple last year received CMA status with regard to their mobile platforms, enabling further action by the regulator aimed at improving their terms for developers and other issues.
The CMA said last year that Apple and Google formed an “effective duopoly” in smartphone operating systems.
