Report from Reuters
In Brief – Britain’s Competition and Markets Authority (CMA) has proposed designating Microsoft’s business software operations with “strategic market status” (SMS) to allow the regulator to apply new digital competition rules to products such as Excel, Teams and its Copilot AI assistant. The competition regulator launched an investigation in May into whether Microsoft’s position in software used by around 20 million people monthly in Britain undermined competition. It now says that Microsoft holds strong positions in PC operating systems, productivity, security, server and database management software, reinforced by barriers customers faced when switching providers. Microsoft disputed the regulator’s assessment, saying its products, including Copilot, were open and interoperable, allowing customers to use them alongside competing services. CMA Chief Executive Sarah Cardell said business software and cloud services underpin workplaces and essential public services. She said organizations should be able to choose suitable products, switch providers and combine services from different suppliers. The regulator’s schedule includes public feedback through November and a final decision by February.
Context – If designated with SMS, Microsoft would become the third company subject to regulation by Britain’s Digital Markets Competition and Consumers Act, which is essentially the UK version of the EU Digital Markets Act. Google has been designated for both Search and Android, while Apple has also been designated for its mobile platform. In June, the CMA imposed new rules on Google Search to allow online publishers to stop their content from being used in AI answers and require greater transparency into how search rankings work. Last May the CMA concluded an SMS investigation of the Amazon and Microsoft cloud businesses and announced that both companies had committed to reduce cloud egress fees and expand cloud interoperability to support greater choice for businesses and public sector organizations in the UK. Alongside its Microsoft software annoucement, the CMA said both cloud giants can do more and threatened further SMS consideration.