Britain’s competition watchdog has reopened its investigation into Microsoft over how it handles cloud software licensing.
The Competition and Markets Authority said on Tuesday it will take a fresh look at Microsoft’s approaches, months after deciding not to act on earlier findings.
This time, the regulator is considering whether to give Microsoft “strategic market status” in business software, and this would allow closer oversight and direct intervention.
At the centre of the case is how Microsoft links its software, including Windows Server and Microsoft 365, to its own cloud platform. Regulators have noted that customers face extra costs when they try to run these tools on rival services.
That, they say, makes it harder for businesses to switch providers or spread workloads across different clouds.
Companies want flexibility and when pricing or licensing regulations get in the way, it limits choice and raises expenses.
The UK cloud market is tough. Amazon and Microsoft each control about 30 to 40% of the sector, covering services such as storage, processing and networking.
Google follows with a much smaller share of around 5 to 10%. Earlier findings from the regulator said this level of concentration was already affecting competition.
The CMA noted that both Microsoft and Amazon have recently taken steps to ease some of the pressure. These include reducing certain fees tied to moving data between platforms and improving how systems work together. Still, the watchdog expects more changes in the coming months.
CMA chief executive Sarah Cardell said the regulator is acting in a “flexible, pragmatic way to deliver real impact, as quickly as possible for UK customers”.
She added: “Cloud remains central to our approach – we’ve seen real progress through our engagement with Microsoft and Amazon to drive meaningful improvements on egress fees and interoperability and we expect more action from them over the coming months.”
Microsoft says the cloud licensing adjustments it has agreed to focus on data transfers, switching between providers and system compatibility.
Its vice chairman and president, Brad Smith, said: “The changes address the CMA’s commitment to ensuring that UK customers can continue to move, deploy, and operate their workloads in the clouds of their choice with confidence, flexibility, and ever-reduced friction.”
Amazon, for its part, said the steps it has taken formalise its support for customer choice, including the ability to run services across multiple cloud platforms.
Beyond the UK, regulators in both the European Union and the United States are examining similar issues in cloud computing. The focus is largely the same, reviewing whether large providers are using their position in software and infrastructure to limit competition.
