The Competition and Markets Authority launched a formal Strategic Market Status investigation into Microsoft’s business software ecosystem on 14 May 2026. The timing matters: it comes just weeks after the same regulator pressured Microsoft and Amazon to reduce cloud egress fees, and as the CMA’s panel assessment found that Microsoft’s software licensing rules are actively hurting rival cloud providers.

For UK businesses, this is not just regulatory background noise. It could meaningfully change the cost and complexity of moving away from Microsoft — or negotiating with them — over the next two to three years.

What the CMA is actually examining

The Strategic Market Status designation is a relatively new tool under the Digital Markets, Competition and Consumers Act 2024. It gives the CMA enhanced powers to intervene in markets where one company is deemed to hold an outsized position — a higher bar than simply being large, but lower than traditional monopoly abuse.

Microsoft’s investigation covers its entire portfolio of business software: productivity tools (Office and Microsoft 365), Windows operating systems for PCs and servers, database management systems, and security products including Defender. The CMA is specifically examining whether:

  • Default settings and bundling make it difficult for businesses to use rival products alongside Microsoft infrastructure
  • Licensing terms discourage switching to alternative cloud platforms like AWS or Google Cloud
  • The integration of Microsoft’s own security software disadvantages third-party security vendors

The investigation will take time — typically 18 to 24 months from launch to final decision. Do not expect changes from this process this year.

What has already changed

The investigation is not the only lever in play. Earlier in 2026, Microsoft and Amazon both agreed to remove or significantly reduce cloud egress fees — charges businesses incur when moving data out of a cloud platform. This has been one of the main financial barriers to switching cloud providers or running a multi-cloud strategy.

If you have been effectively locked into one cloud provider partly because the cost of moving data elsewhere felt prohibitive, that barrier is now lower. It is worth revisiting any cloud contracts signed before 2026 to check whether the egress fee changes apply to your account. Some do automatically; others require renegotiation.

What UK SMEs should do now

The practical reality is that the CMA investigation will not produce meaningful remedies this year. But it is a useful prompt to review your actual position and options.

Audit your Microsoft dependency. List every Microsoft product your business relies on: M365 licences, Azure services, Teams, SQL Server, Defender. For each, ask honestly: what would it cost — in time and money — to replace this? Some will be genuinely mission-critical; others are simply default choices that have never been revisited.

Check your renewals. If you are approaching a renewal on Microsoft 365 or Azure, this is a good moment to negotiate. Resellers often have more flexibility than the headline pricing suggests, and the regulatory pressure on Microsoft is a real lever — particularly on multi-year deals.

Design for flexibility from the start. If you are building new systems, avoid deep single-vendor lock-in where you can. The team at BuildApps regularly helps businesses architect software and data workflows that interoperate across tools — rather than being hard-coded into one vendor’s ecosystem. That design decision is far easier to make upfront than to undo later.

The bigger picture

The CMA’s investigation reflects a broader shift in how UK regulators view Big Tech’s dominance in business software. AI tools like Copilot are deepening that dependency, and regulators are watching carefully. If Microsoft is found to hold Strategic Market Status, the CMA could impose obligations around interoperability, data portability, and pricing transparency.

That outcome would benefit every business that relies on these tools. But the process is measured in years. The smartest move in the meantime is to understand exactly what you are locked into — before you need to get out in a hurry.