microsoft The company is facing new scrutiny of its business software ecosystem from the UK’s competition regulator as Europe ramps up efforts to diversify its technology stack and expand its digital sovereignty.
Britain’s Competition and Markets Authority announced on Tuesday that it will launch a “strategic market situation (SMS) investigation” into the tech giant’s enterprise software suite from May.
The regulator said in a statement that hundreds of thousands of businesses and public sector organizations in the UK use Microsoft business software every day, including Windows, Word, Excel, Teams and the AI platform Copilot.
“The SMS designation allows us to address remaining concerns surrounding Microsoft’s licensing practices in the cloud, while also ensuring a level playing field as AI is rapidly integrated into everyday business software tools,” CMA CEO Sara Cardel said in a statement.
Microsoft is committed to working “quickly and constructively” to address the issues identified by the CMA, company president Brad Smith said.
“We are aware that the CMA continues to consider and evaluate further issues related to our products and services, including the business software market,” Smith added in a statement.
google and apple was designated SMS by the CMA in October for mobile platforms. This status is not a finding of wrongdoing, but it does mean that companies must comply with rules designed to prevent abuse of a dominant position.
Addressing CMA concerns
In July, the CMA released the results of its Cloud Services Market Study. As a result, market concentration and barriers to entry into the cloud services market have led to Amazon Possessing “significant unilateral market power.”
According to the report, Microsoft and AWS Each company had a 30-40% share of the infrastructure-as-a-service (IaaS) market, which includes processing, storage, networking, and other raw computing.
According to the regulator, after working with the CMA, Microsoft and Amazon have come up with measures related to cloud egress charges (fees associated with switching providers) and interoperability.
Amazon said in a statement that it is formalizing its “commitment to customer choice through clear and comprehensive rights around multicloud adoption, data portability, and switching processes.”
“We have also agreed to continued and systematic engagement with the CMA to support their efforts to ensure that the cloud continues to drive the UK’s thriving innovation economy for years to come.”
Microsoft’s Smith said: “These changes are in response to the CMA’s commitment to enable UK customers to continue moving, deploying and operating their workloads on the cloud of their choice with confidence and flexibility, with less friction than ever before.”
European companies and governments’ dependence on U.S. technology systems has come under increasing scrutiny as geopolitical tensions have recently escalated and European capital has accelerated efforts to diversify its technology stack.
