UK regulator proposes Strategic Market Status for Microsoft

The UK Competition and Markets Authority (CMA) has proposed granting Microsoft ‘Strategic Market Status’ (SMS) due to concerns regarding its software business. This designation, under the Digital Markets, Competition and Consumers (DMCC) Act 2024, is comparable to the ‘gatekeeper’ status established by the European Union’s Digital Markets Act.

The investigation, which began in May 2026, examines whether Microsoft leverages its dominant position to stifle competition by tightly linking various software products. The products under scrutiny include Windows, Windows Server, Office, Copilot, SQL Server, and Defender, which serve approximately 20 million monthly users across the private and public sectors.

The CMA noted that Microsoft holds strong positions in five key digital areas: PC operating systems, productivity software, security software, server operating systems, and relational database management systems. The authority expressed concern that high switching costs prevent customers from choosing alternative solutions, potentially limiting access to diverse AI services and impacting the resilience of critical infrastructure and government entities. A consultation period is open until November 13, 2026, with a final decision expected by February 13, 2027.