On Oct. 16, 2026, the UK Competition and Markets Authority (CMA) proposed designating Microsoft as having strategic market status (SMS) for its business software ecosystem and opened a consultation on its provisional assessment. The proposed scope covers five software areas, with Copilot features included in the investigation. The CMA has not made a final designation, and it says SMS designation does not assume wrongdoing.
What the CMA’s proposal covers
The CMA grouped the ecosystem into productivity software suites, PC operating systems, server operating systems, relational database management systems and security software. That makes the case broader than an inquiry focused solely on Copilot.
The investigation notice includes Copilot features used with Microsoft 365 apps and features accessed through the Microsoft 365 Copilot app. The CMA is also examining how AI-assistant functions fit within the activities under review.
In its provisional assessment, the CMA concluded that Microsoft meets the statutory conditions for SMS, citing substantial market power across the ecosystem and each activity, as well as a strategically significant position. Those conclusions remain part of the proposed decision under consultation.
The CMA’s figures for UK organizations
The CMA says more than 1 million UK businesses and public-sector organizations use Microsoft business software, with around 20 million monthly users. Its proposed-decision document reports that UK organizations spent more than $7 billion on Microsoft products in 2025.
The regulator’s provisional concerns include product bundling, interoperability, customer switching and licensing choices for cloud deployment. It is also examining whether rival AI providers can compete on a level playing field with Copilot.
Consultation and decision deadlines
The CMA consultation closes at 5 p.m. on Nov. 13, 2026. The statutory deadline for its final SMS decision is Feb. 13, 2027. The CMA’s indicative timetable includes further evidence gathering and possible oral representations by Microsoft before the final decision.
Organizations that want to respond can use the CMA’s consultation page. If Microsoft receives SMS designation and the relevant legal tests are met, the CMA could consider targeted conduct requirements or pro-competition interventions.
